If the Economy Is in a Recession and Prices Are

question 145

Multiple Choice

If the economy is in a recession and prices are relatively stable, then the discretionary fiscal policy or policies that would most likely be recommended to correct this macroeconomic problem would be:

• A)increased government spending or increased taxation, or a combination of the two actions.
• B)increased government spending or decreased taxation, or a combination of the two actions.
• C)increased government spending or increased taxation, but not a combination of the two actions.
• D)decreased government spending or decreased taxation, or a combination of the two actions.

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Definitions:

Prices Paid

The amount of money expended by consumers or businesses to purchase goods or services.

Acreage Allotments

Regulations or programs that set limits on the amount of land that can be used for the cultivation of certain crops, often to control supply and stabilize market prices.

Price-Support Program

Government interventions designed to maintain the market price of a good at a certain level.

Particular Crop

A specific type of crop grown for agricultural production, often defined by its use or species.