Which of the following is an example of a countercyclical policy?
A) Government purchases are increased during a period of high unemployment.
B) Taxes are increased during a period of high unemployment.
C) Interest rates are increased during a period of high unemployment.
D) The money supply is decreased during a period of high unemployment.

Question

Quizplus · Accepted Answer

Countercyclical policies are measures taken by the government to counteract the business cycle. Increasing government purchases during a period of high unemployment is a countercyclical policy because it aims to stimulate economic activity and reduce unemployment.

Which of the Following Is an Example of a Countercyclical