Which of the following policies would stabilization policy activists support when the economy is experiencing unemployment above the natural rate?
A)a decrease in the money supply
B)a reduction in tax rates
C)a decrease in government purchases
D)an increase in taxes

Question

Quizplus · Accepted Answer

Stabilization policy activists would support a reduction in tax rates when the economy is experiencing unemployment above the natural rate. Lowering tax rates increases consumers' disposable income, which leads to an increase in consumer spending, stimulating economic growth and job creation.

Which of the Following Policies Would Stabilization Policy Activists Support