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Question
Which among the following steps is most likely to be taken at the time of an economic recession?
(a) Cut in tax rates accompanied by increase in interest rate
(b) Increase in expenditure on public projects
(c) Increase in tax rates accompanied by reduction of interest rate
(d) Reduction of expenditure on public projects
Answer:
B
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Explanation:
During an economic recession, one of the most likely steps taken is an increase in expenditure on public projects. This is aimed at stimulating economic activity, creating employment opportunities, and boosting overall demand in the economy.
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