Answer:
The U.S. government uses two types of policies monetary policy and fiscal policy to influence economic performance. Both have the same purpose: to help the economy achieve growth, full employment, and price stability. When we're experiencing inflation, the government will decrease spending or increase taxes, or both. (this is the internets answer) Government activity affects the economy in four ways: The government produces goods and services, including roads and national defense. Less than half of federal spending is devoted to the production of goods and services. The government collects taxes, and that alters economic behavior. (that is my answer) so it is obviously C BOLDED BECAUSE IT IS THE SHORT ANSWER
Explanation:
The U.S. government influences economic growth and stability through the use of fiscal policy (manipulating tax rates and spending programs) and monetary policy (manipulating the amount of money in circulation). This stimulates demand and encourages economic growth. Cuts in government spending have the opposite effect. Fiscal policy uses the government's power to spend and tax. When the country is in a recession, the government will increase spending, reduce taxes, or do both to expand the economy. When we're experiencing inflation, the government will decrease spending or increase taxes, or both. The Government should play an active role in the economy because it promotes smooth business cycles, regulate financial markets to protect against speculation & instability, and through Fiscal and Monetary Policy. The consensus opinion among the vast majority economists about the government's role in the time of economic crisis is Keynesian that the federal government is there to prop up the situation by providing support and stimulus. Otherwise, economies collapse, leading to widespread suffering and instability.
