(A) Raise taxes on the wealthy
(B) Reduce government spending
(C) ** Stabilize the economy
EXPLANATIONS BELOW
Concept note-1: -The objective of a stimulus package is to reinvigorate the economy and prevent or reverse a recession by boosting employment and spending.
Concept note-2: -The federal government provides fiscal stimulus when it increases spending, cuts taxes, or both, to shore up households’ and businesses’ demand for goods and services during a recession.
Concept note-3: -Economic stimulus relies on encouraging private sector spending to make up for loss of aggregate demand. Fiscal stimulus measures include deficit spending and lowering taxes. Monetary stimulus measures are produced by central banks and may include lowering interest rates.
Concept note-4: -The law provides for tax rebates to low-and middle-income U.S. taxpayers, tax incentives to stimulate business investment, and an increase in the limits imposed on mortgages eligible for purchase by government-sponsored enterprises (e.g. Fannie Mae and Freddie Mac).
Concept note-5: -In the short term, governments may focus on macroeconomic stabilization-for example, expanding spending or cutting taxes to stimulate an ailing economy, or slashing spending or raising taxes to combat rising inflation or to help reduce external vulnerabilities.