Appropriate fiscal policy in the U.S.in 2009 would attempt to
A)increase taxes.
B)decrease aggregate supply.
C)increase aggregate demand.
D)decrease aggregate demand.

Question

Quizplus · Accepted Answer

The appropriate fiscal policy in the U.S. in 2009 would attempt to increase aggregate demand to stimulate the economy. This could be done through measures such as government spending on infrastructure projects or tax cuts to increase disposable income and encourage consumer spending. Decreasing aggregate demand (option D) or decreasing aggregate supply (option B) would further contract the already struggling economy. Increasing taxes (option A) would also reduce disposable income and potentially decrease consumer spending, leading to further economic contraction.

Appropriate Fiscal Policy in the U