If there is a recessionary gap in the economy, discretionary fiscal policy would likely involve Jan action to

Question

Quizplus · Accepted Answer

During a recessionary gap, the economy is producing below its potential and unemployment is high. To address this, discretionary fiscal policy would involve increasing government spending or decreasing taxes to shift the aggregate demand curve to the right, increasing output and employment.

If There Is a Recessionary Gap in the Economy, Discretionary