All of the following are likely to be effective at eliminating a recessionary gap, except one. Which is the exception?
A) reducing Social Security payments to beneficiaries
B) reducing personal income taxes
C) increasing government expenditures on the interstate highway network
D) increasing farm subsidies
E) reducing corporate income taxes

Question

Quizplus · Accepted Answer

Reducing Social Security payments to beneficiaries is not likely to be effective at eliminating a recessionary gap as it reduces the income of individuals and may worsen the economic situation. Choice B, C, E are likely to be effective as reducing personal income taxes and corporate income taxes increases disposable income and incentivizes consumer and business spending while increasing government expenditures on infrastructure like the interstate highways creates jobs and spurs economic activity. Increasing farm subsidies can also increase spending and consumption in the agricultural sector.

All of the Following Are Likely to Be Effective at Eliminating