Final answer:
During an economic emergency like the Great Depression, governments are most likely to use expansionary fiscal policy to spend more money on services and jobs, thereby increasing aggregate demand and aiming to boost the economy out of recession. The correct answer is option: A. spend more money on services and jobs for citizens.
Step-by-step explanation:
During an economic emergency like the Great Depression, governments are most likely to utilize fiscal policy to spend more money on services and jobs for citizens. This approach, known as expansionary fiscal policy, aims to increase the level of aggregate demand through increased government spending or reductions in taxes.
It is considered most appropriate when an economy is in recession and producing below its potential Gross Domestic Product (GDP). The goal is to stimulate the economy by increasing output and decreasing unemployment, thereby reducing the length and severity of an economic recession. However, such actions may result in increasing annual government budget deficits and a rise in the national debt.
On the other hand, contractionary fiscal policy, which includes cuts in government spending or increases in taxes, is typically used when an economy is producing above its potential GDP. During the Great Depression, expansionary fiscal policy would have been favored to address the widespread unemployment and significant drop in economic activity.