Question

suppose the federal government attempts to combat a recession by purchasing a new fleet of warships for the navy produced by a us manufacturer. what type of economic policy is the government conducting?

Answer 1

The type of economic policy conducted by the government is known as an expansionary fiscal policy.

A recession is when the gross domestic product of a country for two consecutive quarters is negative. In a period of recession, there is a slowdown in the economy.

Expansionary fiscal policy is are steps taken by the government of a country to increase the money supply in the economy. Money supply can be increased by increasing government spending or cutting tax rates.

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