In working to correct a recession with fiscal policy, the government can lower tax rates or increase spending to encourage demand and spur economic activity.
Fiscal policy which increases aggregate demand directly through an increase in government spending is said to be typically called expansionary or loose. So, to counter a recession, it will use expansionary policy in order to increase the money supply and reduce interest rates.
Fiscal policy tends to uses the government's power to spend and tax. When the country is in recession, the government will then reduce taxes, increase spending, or do both to expand the economy.
Hence, to counter a recession, it will use expansionary policy.
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