Final answer:
The government may lower taxes when consumer spending has decreased to stimulate the economy. Tax cuts can increase consumer and investment spending and lead the economy out of a recession. Lowering taxes can also provide individuals with more disposable income, potentially increasing consumer spending.
Step-by-step explanation:
Under certain circumstances, the government may lower taxes if consumer spending has decreased. Tax cuts can increase consumer and investment spending, which can help stimulate the economy. When the economy is in a recession and GDP is less than potential, tax cuts can increase GDP and lead the economy out of recession.
Lowering taxes can also provide individuals with more disposable income, which can potentially lead to increased consumer spending.
Learn more about government lowering taxes