By using restrictive fiscal policy during the Great Depression,the government improved the economic situation.

Question

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Restrictive fiscal policy, such as higher taxes and reduced government spending, can actually worsen a recession or depression by reducing demand and increasing unemployment. The government's use of expansionary fiscal policy (lowering taxes and increasing spending) and monetary policy during the Great Depression helped to improve the economic situation.

By Using Restrictive Fiscal Policy During the Great Depression,the Government