Answer: Increased public expenditure on infrastructure.

**Explanation:** - **Option A (A rise in sales taxes):** Incorrect. An increase in sales taxes is contractionary, as it reduces disposable income and lowers consumer demand. Expansionary fiscal policy typically involves tax cuts to stimulate demand. - **Option B (A reduction in interest rates):** Incorrect. While a reduction in interest rates is expansionary, it falls under monetary policy, not fiscal policy. Fiscal policy involves government spending and taxation. - **Option C (Increased public expenditure on infrastructure):** Correct. Expansionary fiscal policy can include increased government spending on infrastructure or social goods to boost aggregate demand and stimulate economic growth. *Key Takeaway:* Expansionary fiscal policy aims to increase aggregate demand through government spending or tax cuts, distinguishing it from monetary policy tools like interest rate adjustments.

Author: LeetQuiz Editorial Team