When the Federal government cuts taxes and increases spending to stimulate the economy during a period of recession, such actions are design to be:

Question

Quizplus · Accepted Answer

Countercyclical policies are designed to stimulate the economy during periods of recession and slow it down during periods of inflation. This often involves cutting taxes and increasing government spending to increase consumer and business spending, which can stimulate economic growth. The other choices (A, B, D) do not accurately describe this type of policy.

When the Federal Government Cuts Taxes and Increases Spending to Stimulate