To stimulate an economy in a recession, the appropriate fiscal policy response would be to:
A) increase taxes.
B) increase transfer payments.
C) decrease government purchases.
D) all of the above.

Question

Quizplus · Accepted Answer

To stimulate an economy in a recession, increasing transfer payments (such as unemployment benefits or other social assistance programs) can directly increase consumer spending by putting more money in the hands of the public, which can help to stimulate demand and economic activity.

To Stimulate an Economy in a Recession, the Appropriate Fiscal