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Regulatory Policy

Question 3 • * HSA 26-27 Economics

Keynes recommended that the government taxes during economic contraction.

Answer
A
increase
B
lower
C
stop collecting

Explanation

During an economic contraction, Keynes recommended expansionary fiscal policy to encourage spending and support demand. Lowering taxes leaves households and businesses with more money to spend or invest, so the correct choice is “lower.”

AI-written and checked against the verified answer.

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