Using fiscal policy, to increase real GDP and employment the government could ________ government expenditure on goods and services or ________ taxes.
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease

Question

Quizplus · Accepted Answer

To increase real GDP and employment, the government could increase its expenditure on goods and services, which directly injects money into the economy, or decrease taxes, which indirectly stimulates the economy by increasing consumers' and businesses' spending power.

Using Fiscal Policy, to Increase Real GDP and Employment the Government