Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increasing government spending
B
Reducing taxes
C
Decreasing interest rates
D
All of the above
Understanding the Answer
Let's break down why this is correct
Answer
A primary tool of fiscal policy that governments use to stimulate the economy during a recession is increased government spending. When the economy is struggling, people may lose jobs and spend less money, leading to even lower demand for goods and services. By spending more on things like infrastructure projects, education, or healthcare, the government can create jobs and put more money into people's hands. For example, if a government builds a new school, it not only creates construction jobs but also provides a better learning environment for students. This increased activity helps boost the economy by encouraging businesses to hire and people to spend.
Detailed Explanation
When the government spends more money, it creates jobs and helps businesses. Other options are incorrect because Some think lowering taxes is the best way to help; Many believe lowering interest rates helps the economy.
Key Concepts
government spending
Topic
Fiscal Policy in Recessions
Difficulty
easy level question
Cognitive Level
understand
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