During the fall of 2007, the United States economy began a descent into deep recession. As a result, the federal government and the Federal Reserve took action to stimulate economic growth. Which of the following would have been an appropriate fiscal policy? (There could be more than one answer) A. the Federal Reserve increasing the money supply to reduce the interest rateB. the federal government providing tax refunds to all taxpayersC. the federal government increasing its regulation of banksD. the federal government spending more money to build more infrastructureE. the federal government beginning to close failing banks

Question

Itzel

Business

14 October, 00:32

During the fall of 2007, the United States economy began a descent into deep recession. As a result, the federal government and the Federal Reserve took action to stimulate economic growth. Which of the following would have been an appropriate fiscal policy? (There could be more than one answer) A. the Federal Reserve increasing the money supply to reduce the interest rateB. the federal government providing tax refunds to all taxpayersC. the federal government increasing its regulation of banksD. the federal government spending more money to build more infrastructureE. the federal government beginning to close failing banks

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Answers (1)

Know the Answer?

Tommy Schneider · Answer 1

The answer is letter D.

Explanation:

The federal government spending more money to build more infrastructure.

Because fiscal policy involves the use of spending or taxation by the Federal Government. During the great recession, the federal government provided tax refunds to all taxpayers and increased spending to build infrastructure. Both actions represent a form of fiscal policy.