Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increasing taxes
B
Cutting government spending
C
Increasing government spending
D
Reducing interest rates
Understanding the Answer
Let's break down why this is correct
Answer
One of the main tools of fiscal policy that the government uses to combat a recession is increasing government spending. When the economy is struggling, people often have less money to spend, which can lead to businesses making less profit and possibly laying off workers. By increasing spending on things like infrastructure projects, the government creates jobs and puts money into the hands of people who will spend it. For example, if the government builds new roads or schools, workers are hired for these projects, and they will then spend their earnings on food, clothing, and other goods. This boost in spending helps to stimulate the economy and can lead to recovery from the recession.
Detailed Explanation
When the government spends more money, it helps create jobs and boosts the economy. Other options are incorrect because Some might think raising taxes helps the government, but it actually takes money away from people; Many believe that cutting spending saves money, but it can lead to fewer jobs and less money in the economy.
Key Concepts
fiscal policy
Topic
Recession and Fiscal Policy Actions
Difficulty
easy level question
Cognitive Level
understand
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