Arrange the following steps in the correct order to illustrate how expansionary fiscal and monetary policies stimulate economic growth during a recession: A) Lower interest rates to encourage borrowing B) Increased government spending on infrastructure C) Higher aggregate demand due to increased consumption D) Improved economic growth and reduced unemployment

To stimulate economic growth during a recession, the first step is to lower interest rates to encourage borrowing. When interest rates are lower, businesses and consumers are more likely to take loans to invest in projects or make purchases, which leads to increased spending. Next, increased government spending on infrastructure can create jobs and put more money into the economy, further boosting demand. As a result, higher aggregate demand occurs due to increased consumption, as people now have jobs and more disposable income. Ultimately, this chain of actions leads to improved economic growth and reduced unemployment, helping the economy recover from the recession.