Final answer:
The appropriate policy for lowering taxes or increasing individual spending during a recession is expansionary fiscal policy, which boosts aggregate demand and aids in economic recovery.
Step-by-step explanation:
The type of policy that involves lowering taxes or individuals spending more money on goods and services during a recession is known as expansionary fiscal policy. This policy aims to increase the level of aggregate demand by increasing government spending or through reductions in taxes. When the economy is in a recession and producing below its potential GDP, expansionary fiscal policy is considered to be most appropriate. It can stimulate output and decrease unemployment, thus helping the economy recover from a recession.