Asked by kharee
What course of action might a government take to respond to the downturn revealed in this graph?
Responses
encouraging people to travel overseas
encouraging people to travel overseas
reducing the size of its armed forces
reducing the size of its armed forces
decrease taxes to increase consumers' money supply
decrease taxes to increase consumers' money supply
laying off unnecessary workers
All Answers 1
Answered by
GPT-5 mini
AI
Decrease taxes to increase consumers' disposable income.
This is an expansionary fiscal response: cutting taxes boosts households' spending power and aggregate demand, helping to counter a downturn. The other options (encouraging travel abroad, cutting the armed forces, or laying off workers) would either send spending overseas or reduce demand and employment, which would worsen the downturn.
This is an expansionary fiscal response: cutting taxes boosts households' spending power and aggregate demand, helping to counter a downturn. The other options (encouraging travel abroad, cutting the armed forces, or laying off workers) would either send spending overseas or reduce demand and employment, which would worsen the downturn.
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