Expansionary fiscal policy: This refers to government actions that aim to increase aggregate demand and stimulate economic growth, such as increasing government spending or reducing taxes.
Automatic stabilizers: These are built-in features of fiscal policy that help stabilize the economy without requiring explicit action from policymakers, such as progressive income taxes or unemployment benefits.
Crowding out effect: This occurs when increased government spending results in reduced private sector investment due to higher interest rates or limited resources availability.