With low inflation and high unemployment, the most likely fiscal stance of the federal government would be:
A) neutral.
B) expansionary.
C) contractionary.
D) pro-cyclical.

Question

Quizplus · Accepted Answer

With low inflation and high unemployment, the economy is likely in a recession or experiencing a slowdown. To stimulate economic activity and reduce unemployment, the government would need to increase its spending or cut taxes, which is expansionary fiscal policy.

With Low Inflation and High Unemployment, the Most Likely Fiscal