The Principle Underlying Fiscal Policy Suggests That When Unemployment Is

question 63

Multiple Choice

The principle underlying fiscal policy suggests that when unemployment is rising and the economy is going into a recession,fiscal policy should: 

• A) stimulate economic activity by decreasing taxes, increasing government spending, or both. 
• B) curb economic activity by reducing government spending, increasing taxes, or both. 
• C) let the forces of supply and demand operate on their own. 
• D) expand the rate of growth of the money supply. 
• E) reduce the rate of growth in the amount of money in circulation.