If the federal government wanted to counteract the effects of a recession, it could

Question

Quizplus · Accepted Answer

Increasing government purchases, such as spending on infrastructure projects, can stimulate the economy by creating jobs and boosting demand for goods and services.

Answer: D
 Decreasing defense spending can free up government resources that can be redirected towards other areas such as education, healthcare, and infrastructure projects. This can also help to reduce the budget deficit, which can have long-term benefits for the economy.

Note: A and B are incorrect choices as increasing taxes during a recession can further slow down the economy by reducing consumer spending, and decreasing the money supply (option E) can lead to higher interest rates, which can also slow down economic growth.

If the Federal Government Wanted to Counteract the Effects of a Recession