The effects of a change in government expenditure has a multiplier effect

a) only when there is a decrease in expenditure.

b) because the resulting change in disposable income generates changes in consumption expenditure.

c) because a change in government expenditure changes potential GDP.

d) only when there is an increase in expenditure.

e) because taxes are left unchanged.

Which of the following is an example of a contractionary fiscal policy?

increasing government expenditure

increasing taxes

cutting transfer payments

A and B

B and C