Explain the impact of the expansionary fiscal and monetary policy on equilibrium prices and output.

The impact of the expansionary fiscal:-

Expansionary fiscal policy is the use of government income (taxes) and spending to boost demand. This is done by expanding the amount it spends and reducing the amout it taxes. This is so that it creates more jobs through expenditure, plus gives consumers greater spending power through lower taxes.

On its own, fiscal policy is the collection and expenditure of revenue by government. In other words, fiscal policy refers to how government collects money through taxes, and what it spends money on, i.e. public defence or welfare payments.

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