Combating recession may require the government to
A)decrease aggregate supply.
B)increase aggregate demand.
C)decrease aggregate demand.
D)decrease government spending.

Question

Quizplus · Accepted Answer

To combat a recession, the government should increase aggregate demand through policies such as increasing government spending, reducing taxes or decreasing interest rates. This helps to stimulate economic growth and increase employment rates. Decreasing aggregate supply or demand or government spending would have a contractionary effect on the economy and worsen the recession.

Combating Recession May Require the Government to