If firms were faced with greater uncertainty because of concern that oil prices might rise, they might decrease expenditures on capital. What response might someone who advocated for "lean against the wind" policies support?
A) decrease the money supply
B) decrease taxes
C) decrease government expenditures
D) increase interest rates

Question

Quizplus · Accepted Answer

"Lean against the wind" policies aim to counteract economic fluctuations. If firms decrease capital expenditures due to uncertainty, reducing taxes can stimulate investment and consumption, offsetting the negative impact on the economy.

If Firms Were Faced with Greater Uncertainty Because of Concern