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Expansionary Fiscal Policy

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A contractionary fiscal policy occurs when government spending is reduced either through from an increase in tax revenues or reduction in public spending and is used in periods in which it seeks slow the growth of aggregate demand. While an Expansionary Fiscal Policy implies an increase in public spending through increases in public spending or lower tax revenues. You can apply expansionary fiscal policies when seeking to increase aggregate demand.
One of the biggest benefits is that fiscal policy can be very effective in increasing the actual production and the decrease of the inflation rate. On the other hand, one of the mayors problems of fiscal policy is the increase in taxes. The benefits of monetary policy is basically its flexibility
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