Why did friedrich hayek call expansionary spending dangerous? o he felt it could lower the money supply and cause deflation. o he felt it could lead to inflation and poor decisions by consumers. o he felt it could lead to deflation and poor decisions by consumers. o he felt it could lower available credit and cause a drop in prices.

He felt it could lead to inflation and poor decision by consumers.

Explanation: Friedrich Hayek called expansionary spending dangerous because he felt it could lead to inflation and poor decision by consumers. Expansionary policy is a monetary policy that aims at expanding economic growth through lowering taxes and expanding the money supply. According to Hayek, an individual makes rational choices when consuming in terms of cost-benefit. He intends to get the maximum net benefit. But expansionary money supply leads to an impulsive or random decision by consumers and inflation.

B: He felt it could lead to inflation and poor decision by consumers.

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