Concept:Expansionary fiscal policy increases aggregate demand by raising government spending or reducing taxes.
Explanation:A decrease in corporate profit tax rates leaves businesses with more after-tax profit.
Higher retained profit encourages firms to invest and expand production.
This increased spending power raises demand in the economy.
Decreasing welfare payments reduces consumer income, so it is a contractionary action.
Purchasing government securities and lowering the bank rate are monetary policy tools, not fiscal policy tools.
Therefore, the expansionary fiscal policy action is a reduction in corporate profit tax rates.
Answer:A. decrease in the corporate profit tax rates