During which phase of the business cycle is expansionary fiscal policy most appropriate?

CA Foundation · Business Economics · PYQS · May 2026
During which phase of the business cycle is expansionary fiscal policy most appropriate?
(A) A. Stagflation
(B) B. Peak
(C) C. Expansion
(D) D. Contraction

Suggested Answer and Working Notes:

Correct Answer: Option (D)

D. Contraction

Topics: Public Finance

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