If the Economy Is in a Recession and Prices Are

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.