In a recessionary gap, the government can stimulate economic activity by employing fiscal policy actions such as decreasing taxes or increasing government spending, which ultimately aims to restore __________ to full employment levels.

In a recessionary gap, the economy is not producing enough goods and services, leading to higher unemployment. The government can use fiscal policy to help boost economic activity. This means they might lower taxes, which gives people and businesses more money to spend, or they could increase government spending on projects like building roads or schools. For example, if the government decides to build a new highway, it creates jobs for construction workers and increases demand for materials, which helps the economy grow. By doing these things, the goal is to bring the economy back to full employment levels, where everyone who wants to work can find a job.