expansionary fiscal policy

A

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An expansionary fiscal poicy is most likely associated with:
A. an increase in government spending on social insurance and benefits
B. crowding out of private investments
C. an increase in capital gains tax rates
Correct answer is B
But, why would it not be A?
Thanks
 
^^ transfer payments are not included in calculation of Government spending, b/c they are basically just tax revenue, reallocated back to people.
 
More importantly(or so I think) A is not right because expansionary fiscal policies are directed (generally speaking) at govt supporting riskier industry and to promote lending, directly contributing to re-invigoration of the economy. Giving out benefits, by no means achieves this objective.
 
If I remember correctly the question mentionned DISCRETIONARY. Benefits are automatic stabilizers. Watch out, there is a mistake in the correction on the website: expansionary policy is linked to a higher budget deficit and bigger spending.
 
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