When using fiscal policy to fight a recession,the government will:
A) decrease taxes and/or increase government expenditures.
B) increase taxes and/or decrease government expenditures.
C) institute technological advancement in the economy.
D) decrease government expenditures.

Question

Quizplus · Accepted Answer

The government will use expansionary fiscal policy, which involves decreasing taxes and/or increasing government expenditures to boost aggregate demand and stimulate economic growth. This will increase disposable income, encourage consumption spending, and boost investment spending, ultimately leading to a rise in production and employment levels.

When Using Fiscal Policy to Fight a Recession,the Government Will