Question

Fiscal policies are actions taken by the government to influence the economy through taxing or spending. To assist the economy to come out of a recession, Congress can pursue a fiscal policy that __________

a. decreases spending
b. raises taxes
c. lowers taxes
d. increases interest rates

Answer 1

In general, to assist the economy to come out of a recession, Congress can pursue a fiscal policy that "c. lowers taxes," since this allows people to spend more money on goods and services.