Question

Suppose that the economy is suffering from a recession (or type of economic downturn). Businesses are closing, and people are losing their jobs. Identify two fiscal policy actions that could help the economy to recover faster and explain why.

Answer 1

Two fiscal policy that can help the economy recover faster would be The government lowering taxes which puts more money into the hands of individuals and results in them buying more goods and services Another way would be the government spending more money on goods and services which is basically the economy, This may result in more jobs and more benefits for the workers and businesses that provide these goods and services.

Answer 2

The two types of fiscal policy that are implemented to recover from the recession period are:

• Expansionary fiscal policies
• Contractionary Fiscal policies.

The government spending and the tax policies that impact the economic conditions, particularly macroeconomic variables such as:

• The aggregate demand for goods and services
• Employment
• Inflation
• Economic growth is referred to as fiscal policy.

• Expansionary fiscal policies----- Cutting taxes, government subsidies, rebates, and increased spending on projects like infrastructure upgrades are all examples of expansionary fiscal policy.

Furthermore, it has the potential to decline the tax rates and leave more money in the hands of people, who will then spend and invest it.

• Contractionary Fiscal policies----- Governments use contractionary fiscal policy to reduce government spending or raise taxes.

These policies, in their most basic form, suck money out of the private economy with the goal of slowing unsustainable production or reducing asset values.

To know more about the fiscal policies, refer to the link below:

https://brainly.com/question/1397945