Suppose that the economy is in the midst of a recession.Which of the following policies would most likely end the recession and stimulate output growth?
A)A congressional proposal to incur a federal surplus to be used for the retirement of public debt.
B)Reductions in agricultural subsidies and veterans' benefits.
C)Postponement of a highway construction program.
D)Reductions in federal tax rates on personal and corporate income.

Question

Quizplus · Accepted Answer

Reducing federal tax rates on personal and corporate income increases disposable income for consumers and reduces costs for businesses, which can stimulate spending and investment, thereby boosting economic activity and helping to end a recession.

Suppose That the Economy Is in the Midst of a Recession.Which