In 2008 due to an economic slowdown and fear of a recession,the government
A) gave a tax rebate.Tax cuts shift aggregate demand right.
B) reduced tax deductions.Tax cuts shift aggregate demand right.
C) gave a tax rebate.Tax cuts shift aggregate demand left.
D) reduced tax deductions.Tax cuts shift aggregate demand left.

Question

Quizplus · Accepted Answer

During an economic slowdown or recession, the government usually tries to boost the economy by increasing aggregate demand, which can be done through fiscal or monetary policies. In this case, the government gave a tax rebate, which is a form of fiscal policy that involves reducing taxes, increasing disposable income, and thus boosting consumption. Tax cuts usually shift aggregate demand to the right, as consumers have more spending power and can purchase more goods and services, thus stimulating economic activity. Therefore, choice A is the best option.

In 2008 Due to an Economic Slowdown and Fear of a Recession,the