contestada

If the economy is in a recession and prices are relatively stable, then the discretionary fiscal policy or policies that would most likely be recommended to correct this macroeconomic problem would be: 
A. Increased government spending or increased taxation, or a combination of the two actions
B. Increased government spending or decreased taxation, or a combination of the two actions
C. Increased government spending or increased taxation, but not a combination of the two actions
D. Decreased government spending or decreased taxation, or a combination of the two actions

Respuesta :

Answer:

The correct answer is option B.

Explanation:

If an economy is in a recession it needs an expansionary policy to boost economic activities. The most appropriate expansionary fiscal policy, in this case, will be increasing government spending and/or decreasing taxes. Both of these tools will lead to an increase in disposable income. This will lead to an increase in demand. This further causes an increase in investment and output.  

So, the correct answer is option B.

ACCESS MORE
ACCESS MORE
ACCESS MORE
ACCESS MORE

Otras preguntas