Expansionary Fiscal Policy: Real-World Examples

Worked IB Economics case studies on expansionary fiscal policy — what happened, how to deploy it in a 15-mark answer, and the evaluation points on both sides.

U.S. dollar relief payments and government support during the COVID-19 economic downturn

Expansionary Fiscal Policy

U.S. COVID-19 Fiscal Relief Response

United States2020 to 2021

The U.S. used large fiscal relief packages during COVID-19 to support incomes, employment and aggregate demand during a severe downturn.

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Japanese government spending flowing to households, infrastructure and businesses to stimulate the economy.

Expansionary Fiscal Policy

Japan's 2025 Economic Package: Expansionary Fiscal Policy

Japan2025–2026

Japan launched a large fiscal package using spending and tax relief to support households, demand and long-term investment.

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German public investment in railways, digital networks, energy infrastructure and schools financed through a long-term infrastructure fund.

Expansionary Fiscal Policy

Germany's €500bn Infrastructure Fund: Fiscal Policy and Long-Run Growth

Germany2025–2036

Germany created a €500bn infrastructure fund to raise public investment, supporting aggregate demand now and productive capacity over time.

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