The United States is experiencing recession, so Congress adopts an expansionary fiscal policy. State governments face a budget shortfall and raise taxes to balance their budgets. The actions of state governments would:

Question

Quizplus · Accepted Answer

Raising taxes by state governments would reduce disposable income, decreasing consumer spending and aggregate demand, which offsets the expansionary fiscal policy aimed at increasing aggregate demand.

The United States Is Experiencing Recession, So Congress Adopts an Expansionary