Raising taxes and reducing the budget deficit is deemed to be a restrictive fiscal policy as it would reduce aggregate demand and slow down GDP growth. Lowering taxes and increasing the budget deficit is considered an expansive fiscal policy that would increase aggregate demand and stimulate the economy.
Raising taxes and reducing the budget deficit is considered a contractionary fiscal policy, as it would decrease aggregate demand and slow economic growth. Lowering taxes and increasing the budget deficit is viewed as an expansionary fiscal policy, which would increase aggregate demand and stimulate the economy.