Which of the following actions aligns with a reflationary (expansionary) fiscal policy?

Choose the correct answer

Explanation

A reflationary fiscal policy aims to stimulate economic growth by increasing government spending or reducing taxes. However, measures like lowering interest rates or encouraging bank lending are typically monetary policy tools, not fiscal. Among the options, expanding bank lending supports economic expansion by increasing money availability, though it is more a monetary than fiscal action. Increasing corporate taxes would contract the economy, while raising government spending is a direct fiscal expansion. Therefore, boosting bank lending is associated with expansionary policy, but it is primarily a monetary measure.

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