Final answer:
Expansionary fiscal policy is most appropriate in response to a recession to stimulate economic growth and increase aggregate demand. The correct option is (A).
Step-by-step explanation:
In response to a recession, expansionary fiscal policy would be most appropriate. Expansionary fiscal policy involves increasing government spending and/or decreasing taxes to stimulate economic growth and increase aggregate demand.
This can help to boost economic activity, reduce unemployment, and promote economic recovery.
An expansionary fiscal policy is represented on a diagram using the aggregate demand and aggregate supply curves.
The aggregate demand curve would shift to the right, indicating an increase in both output and prices. This would result in higher employment levels and increased consumer spending.