If a countercyclical policy approach is used, a decrease in taxes might be used to reduce:
A) unemployment.
B) inflation.
C) the size of the private sector in the economy.
D) national output.

Question

Quizplus · Accepted Answer

A decrease in taxes can stimulate economic activity by increasing disposable income for consumers and investment capital for businesses, which can help reduce unemployment during economic downturns.

If a Countercyclical Policy Approach Is Used, a Decrease in Taxes