Practice Quiz

AP Economics Exam Prep

Category - Economics

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Which of the following fiscal policy combinations would a government most likely follow to stimulate economic activity when the economy is in a severe recession?
  1. Increasing both taxes and spending
  2. Increasing taxes and decreasing spending
  3. Decreasing taxes and increasing spending
  4. Decreasing both taxes and spending
Explanation
Answer: C - Decreasing taxes and increasing spending.
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