In 2009, President Obama and Congress stimulated aggregate demand by
A)increasing taxes and government spending.
B)decreasing taxes and government spending.
C)increasing taxes and decreasing government spending.
D)decreasing taxes and increasing government spending.

Question

Quizplus · Accepted Answer

President Obama and Congress stimulated aggregate demand by decreasing taxes and increasing government spending. This is known as fiscal stimulus or expansionary fiscal policy. By increasing government spending, this injected more money into the economy, creating jobs, and increasing consumer spending. By decreasing taxes, this left more money in the hands of taxpayers to spend, thereby stimulating demand.

In 2009, President Obama and Congress Stimulated Aggregate Demand by