An appropriate fiscal policy for a severe recession is
A)a decrease in government spending.
B)a decrease in tax rates.
C)appreciation of the dollar.
D)an increase in interest rates.

Question

Quizplus · Accepted Answer

A decrease in tax rates can stimulate economic activity by increasing disposable income for consumers and encouraging investment by businesses, which is appropriate during a severe recession.

An Appropriate Fiscal Policy for a Severe Recession Is