Stabilization policy used during the Great Recession could be abstracted by a
A)decrease in aggregate demand.
B)decrease in aggregate supply.
C)increase in aggregate demand.
D)increase in aggregate supply.

Question

Quizplus · Accepted Answer

During the Great Recession, in order to use stabilization policy, the government aimed to increase aggregate demand through measures such as tax cuts, increased government spending, and monetary policy actions such as lowering interest rates to stimulate borrowing and investment. This was done to counteract the decrease in aggregate demand that occurred during the recession.

Stabilization Policy Used During the Great Recession Could Be Abstracted