Fiscal policy is well-suited to counteract a recession or depression when:
A) unemployment is low.
B) taxes are high.
C) a real negative shock occurs.
D) resources are underused.

Question

Quizplus · Accepted Answer

Fiscal policy is effective in counteracting a recession or depression when resources are underused, as it can stimulate demand and increase employment by utilizing idle resources.

Fiscal Policy Is Well-Suited to Counteract a Recession or Depression