📚 Learning Guide
Recession and Fiscal Policy Actions
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During a recession, which fiscal policy action is most likely to stimulate economic growth?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
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Choose the Best Answer

A

Increasing taxes

B

Decreasing government spending

C

Increasing government spending

D

Reducing public investment

Understanding the Answer

Let's break down why this is correct

Answer

During a recession, the government can use fiscal policy to help stimulate economic growth by increasing public spending or cutting taxes. When the government spends more money on projects like building roads or schools, it creates jobs and puts money into people's hands. This extra money allows people to buy more goods and services, which can help businesses grow and hire more workers. For example, if the government decides to build a new bridge, workers will be needed for the construction, and once the bridge is built, it makes travel easier for everyone, boosting local businesses. Overall, these actions help to kickstart the economy by encouraging spending and investment.

Detailed Explanation

When the government spends more money, it creates jobs and helps businesses. Other options are incorrect because Some think that raising taxes helps pay for services; Many believe cutting spending saves money.

Key Concepts

recession
economic stimulus
Topic

Recession and Fiscal Policy Actions

Difficulty

medium level question

Cognitive Level

understand

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