What is a primary tool for Congress to stimulate the economy?

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Prepare for the Personal Finance Module 3 DBA Test with interactive flashcards and multiple choice questions. Each question includes hints and detailed explanations to help you succeed. Start your journey to financial mastery today!

Increasing spending is a primary tool for Congress to stimulate the economy because it directly injects money into the economy, creating demand for goods and services. When the government increases its spending on public projects, education, social programs, and infrastructure, it generates jobs and income for workers and businesses. This increase in income leads to greater consumer spending, which further stimulates economic growth.

When Congress enacts fiscal policies that emphasize increased spending, the goal is to spur economic activity, especially during times of economic downturn or recession. This approach can help to reduce unemployment, enhance economic output, and stabilize markets. By funding various initiatives, Congress plays a crucial role in managing economic cycles and fostering growth.

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