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    Question

    What action might a government take to stimulate

    economic growth during a recession?
    A Impose stringent trade restrictions Correct Answer Incorrect Answer
    B Substantially increase tax rates Correct Answer Incorrect Answer
    C Reduce government expenditure Correct Answer Incorrect Answer
    D Boost government expenditure Correct Answer Incorrect Answer

    Solution

    During a recession, governments often adopt expansionary fiscal policies to stimulate economic growth. Increasing public spending is a common measure to boost aggregate demand, create jobs, and revitalize economic activity. This approach is based on Keynesian economics, which advocates for government intervention to counteract economic downturns.

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