Which of the following policies would be advocated by someone who wants the government to follow an active stabilization policy when the economy is experiencing severe unemployment?
A)decrease the money supply
B)increase government expenditures
C)increase taxes
D)All of the above are correct.

Question

Quizplus · Accepted Answer

When the economy is experiencing severe unemployment, an active stabilization policy would advocate for an increase in government expenditures to stimulate aggregate demand and create jobs. Decreasing the money supply or increasing taxes could have contractionary effects on the economy and worsen the unemployment situation.

Which of the Following Policies Would Be Advocated by Someone