The Fisherland government is facing a recession with rising unemployment and decreased consumer spending. To combat this downturn, they decide to implement a fiscal policy. Which of the following actions would most effectively stimulate economic activity in this situation?

To stimulate economic activity during a recession, the Fisherland government can use fiscal policy, which involves changing government spending and taxes. One effective action would be to increase government spending on public projects, such as building roads or schools, because this creates jobs and puts money into people's hands. For example, if the government spends $1 million on a new school, it can hire workers and buy materials, which helps boost local businesses and encourages more spending. Additionally, lowering taxes can give families more disposable income, allowing them to spend more on goods and services. Together, these actions can help revive the economy by increasing demand and reducing unemployment.