Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase taxes
B
Decrease government spending
C
Increase government spending
D
Raise interest rates
Understanding the Answer
Let's break down why this is correct
Answer
During a recession, a common fiscal policy action taken by the government is to increase public spending. This means the government spends more money on things like building roads, improving schools, or funding healthcare. The idea behind this is to create jobs and boost the economy, as more people working means more money is circulating. For example, if the government decides to build a new highway, it hires construction workers and buys materials, which helps those workers earn money and spend it in their communities. This increased spending can help lift the economy out of a recession by encouraging more business activity and consumer confidence.
Detailed Explanation
During a recession, people spend less money. Other options are incorrect because Some think raising taxes helps the government; It's a common belief that cutting spending saves money.
Key Concepts
recession
Topic
Recession and Fiscal Policy Actions
Difficulty
easy level question
Cognitive Level
understand
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