In recession more money needs to be circulating
1) tax cut
2)spend on subsidies for farms
Tax increases and sale of bonds take cash out of circulation
Suppose the economy has been producing its potential, but it is now experiencing a recession. Which of the following is a discretionary fiscal policy that would bring the economy closer to its potential output? Check all that apply.
1) A tax cut
2) A tax increase
3) The sale of bonds by the Fed
4) An additional $10 billion in spending on agricutural subsidies
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