A) an increase in taxes and an increase in government spending
B) a decrease in taxes and an increase in government spending
C) an increase in taxes and no change in government spending
D) a decrease in taxes and a decrease in government spending

Question

A) an increase in taxes and an increase in government spending 
B) a decrease in taxes and an increase in government spending 
C) an increase in taxes and no change in government spending 
D) a decrease in taxes and a decrease in government spending

Quizplus · Accepted Answer

The best choice would be a decrease in taxes and an increase in government spending, as this would stimulate the economy through increased consumption and investment. This approach is often referred to as expansionary fiscal policy and is used during periods of recession or economic slowdown. A decrease in taxes would encourage consumers and businesses to spend more, while an increase in government spending would create jobs and boost economic activity.

A) an Increase in Taxes and an Increase in Government