Question

Discuss whether the use of fiscal policy is the most effective way to bring an economy out of a recession

Answer 1

I would agree to this point strongly the role of fiscal policy to bring an economy out of a recession because fiscal policy directly contributes to the aggregate demand of the economy. Under fiscal policy, the government can directly raise the investments by starting new projects which would immediate create the jobs and raise income levels and result in higher demand.

Even lowering taxes also induce demand from consumers as people tend to spend more due to higher disposable income.

the above is answer..