Governments implement expansionary spending to boost economic growth during recessions, resulting in positive effects like increased economic output. However, negative consequences such as inflation and budget deficits can also arise.
Expansionary spending is chosen by governments to stimulate economic growth during recessions. This policy involves increasing government spending or cutting taxes to boost aggregate demand. Positive effects include higher economic output, job creation, and increased consumer spending. However, negative effects may include inflationary pressures, budget deficits, and potential inefficiencies in resource allocation.
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