Countercyclical fiscal policy attempts to
A) smooth out expansions and recessions in the business cycle.
B) prevent economies from falling into recession.
C) prevent economies from entering into expansion.
D) maximize expansions and minimize recessions.
E) maximize expansions and maximize recessions.

Question

Quizplus · Accepted Answer

Countercyclical fiscal policy is aimed at reducing the effects of business cycle fluctuations by stimulating economic activity during recessions and slowing it down during expansions to achieve a more stable economy.

Countercyclical Fiscal Policy Attempts to