Which of the following is a supply-side policy action to eliminate a recession?
A)Increased investment in infrastructure.
B)The purchase of securities in the open market by the Fed.
C)An increase in the marginal tax rate.
D)A decrease in the reserve requirement.

Question

Quizplus · Accepted Answer

Increased investment in infrastructure is a supply-side policy action aimed at increasing the productive capacity of the economy. This can lead to an increase in aggregate supply, which can help eliminate a recession. B is a monetary policy action, not a supply-side policy action. C is a demand-side policy action that aims to decrease consumption and investment, which may worsen a recession. D is a monetary policy action that aims to increase bank lending and liquidity, but it may not necessarily lead to an increase in aggregate supply or eliminate a recession.

Which of the Following Is a Supply-Side Policy Action to Eliminate