Policy Makers and Citizens Who Want to Expand the Size

Multiple Choice

Policy makers and citizens who want to expand the size of the government sector would favor stabilization policies that

A) raise G to eliminate a recessionary gap and lower taxes to eliminate an inflationary gap.
B) raise G to eliminate a recessionary gap and raise taxes to eliminate an inflationary gap.
C) reduce taxes to eliminate a recessionary gap and raise G to eliminate an inflationary gap.
D) reduce taxes to eliminate a recessionary gap and reduce G to eliminate an inflationary gap.