If Congress votes to increase government purchases and at the same time decrease personal income taxes, they
A)have decided to balance the federal budget.
B)have voted for the proper policy to counteract a recessionary gap.
C)have voted for the proper policy to counteract an inflationary gap.
D)are trying to achieve a federal budget surplus.

Question

Quizplus · Accepted Answer

Increasing government purchases and decreasing personal income taxes are expansionary fiscal policies aimed at stimulating economic growth, which is appropriate to counteract a recessionary gap.

If Congress Votes to Increase Government Purchases and at the Same