Zeta's economy is currently producing at a point inside its production possibilities curve due to a recessionary gap. If the government decides to implement a fiscal policy aimed at reducing the unemployment rate, which action is most likely to help Zeta move towards its potential output?

When an economy is producing inside its production possibilities curve, it means resources are not being used efficiently, often due to high unemployment. To help Zeta move towards its potential output, the government can implement fiscal policies like increasing public spending or cutting taxes. For example, if the government builds new schools and roads, it creates jobs, which helps people earn money and spend it in the economy. This increased demand can encourage businesses to hire more workers and produce more goods, moving the economy closer to its full potential. By investing in projects that boost employment, Zeta can reduce the recessionary gap and improve overall economic health.