To try to stimulate aggregate demand to end a recession, a government could:
A) reduce the money supply or contract fiscal policy to decrease total spending.
B) reduce the money supply or contract fiscal policy to increase total spending.
C) increase the money supply or expand fiscal policy to decrease total spending.
D) increase the money supply or expand fiscal policy to increase total spending.

Question

Quizplus · Accepted Answer

To stimulate aggregate demand and potentially end a recession, a government can increase the money supply (a monetary policy action) or expand fiscal policy (for example, through increased government spending or tax cuts). Both of these actions are designed to increase total spending in the economy.

To Try to Stimulate Aggregate Demand to End a Recession