A country wants to reduce its unemployment rate. How would fiscal policy traditionally be used to resolve unemployment?
A) Reduce government purchases.
B) Reduce taxes.
C) Increase the federal funds rate.
D) Sell bonds in the open market.

Question

Quizplus · Accepted Answer

Reducing taxes can stimulate economic activity by increasing disposable income for consumers and investment capital for businesses, potentially leading to job creation and a reduction in unemployment.

A Country Wants to Reduce Its Unemployment Rate