Someone advocates using fiscal policy to stimulate the economy and reduce unemployment. Which of the following might this person advocate to implement the fiscal policy?

A) increase federal spending
B) reduce tax rates
C) both A and B
D) neither A nor B

I think it is B...

I disagree.

http://www.investopedia.com/articles/04/051904.asp/#axzz21NA9GMek

Then the only other option is A?

You have three options besides B.

The answer is c

To determine the correct answer, let's break down the options and the potential impacts they can have on stimulating the economy and reducing unemployment.

A) Increase federal spending: When the government increases its spending on various sectors such as infrastructure projects, education, healthcare, or government programs, it injects money into the economy. This increase in government spending can create job opportunities and boost economic activity. Therefore, increasing federal spending can help stimulate the economy and reduce unemployment.

B) Reduce tax rates: Lowering tax rates can potentially provide individuals and businesses with more disposable income. With more money in their pockets, people may increase their spending, leading to a rise in consumer demand. Similarly, businesses may invest more, expand their operations, and hire additional workers. Overall, reducing tax rates can also have a positive impact on the economy and potentially reduce unemployment.

C) Both A and B: Since both increasing federal spending (option A) and reducing tax rates (option B) can stimulate the economy and reduce unemployment, choosing option C (both A and B) would be the most comprehensive and desirable approach.

D) Neither A nor B: This option suggests that neither increasing federal spending nor reducing tax rates would be advocated. As both of these options have the potential to stimulate the economy and reduce unemployment, choosing option D is unlikely to be the correct answer.

Based on the explanations provided, the correct answer should be C) both A and B.