Macroeconomic Policy Measures During Recession

During an economic recession, the government adopts expansionary fiscal policy to stimulate demand and economic activity. Increasing expenditure on public projects injects money directly into the economy, boosts employment, and creates a multiplier effect on demand. Cutting expenditure or raising taxes would contract demand further, worsening the recession. > Counter-cyclical fiscal policy during a recession focuses on boosting public spending to revive market demand. Answer: (b).