If a countrys national government wants to stimulate spendin

If a country\'s national government wants to stimulate spending in the economy, it should: decrease taxes and increase government spending. increase taxes and decrease government spending. increase taxes and government spending. decrease taxes and government spending.

Solution

Ans : decrease taxes and increase government spending.

Explanation:

If a country\'s national government wants to stimulate spending in the economy , it should decrease taxes and simultaneously increase government spending. People will have more disposable income due to decrease in tax rate. As a result , the aggregate demand will increase in the economy . And the same time increase in goverment spending will stimulate the economy through multiplier effect. Generally , the goverment takes this action when there is recession in the economy.