To eliminate a recessionary gap,the government can ________ government expenditures on goods and services or ________ taxes.

Question

Quizplus · Accepted Answer

To eliminate a recessionary gap, the government needs to increase aggregate demand. One way to do that is by increasing government expenditures on goods and services. Another way is to decrease taxes, as this would increase disposable income, leading to an increase in consumption spending. Therefore, the correct choice is to increase government expenditures on goods and services or decrease taxes, which is option D.

To Eliminate a Recessionary Gap,the Government Can ________ Government Expenditures