Which best explains how expansionary policies can facilitate economic growth ?

a: they prompt decreased demand
b: they inspire consumer confidence
c: they increase disposable income
d: they reduce consumer debt

C. Increase disposable income

Expansionary policies are macroeconomic policies that seek to encourage economic development by expanding the money supply, lowering interest rates, increasing government spending or cutting taxes.

The correct answer is letter "C": they increase disposable income.

Explanation:

Expansionary policy is a macroeconomic concept that focuses on expanding the economy to counteract cyclical downtowns. Expansionary policies can be applied to use monetary policy to expand the money supply or to increase government spending and or tax cuts to stimulate the economy. Specialists in the field must be cautious with expansionary policies since being overaggressive could lead to inflation.

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