AP Macroeconomics Question 452: Answer and Explanation
Use your browser's back button to return to your test results.
15. Of the following choices, which combination of fiscal and monetary policy would most likely reduce a recessionary gap?
FISCAL POLICY MONETARY POLICY
- A. Increase taxes. Increase the reserve ratio.
- B. Decrease spending. Sell Treasury securities.
- C. Decrease taxes. Buy Treasury securities.
- D. Increase spending. Increase the reserve ratio.
- E. Decrease taxes. Increase the discount ratio.
Correct Answer: C
C-Have a strong knowledge of fiscal and monetary policies.