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.