An economy is facing high unemployment but stable prices. Which combination of g

Question

An economy is facing high unemployment but stable prices. Which combination of government policies is most likely to reduce unemployment? A. The purchase of government securities in the open market and an increase in taxes B. The sale of government securities in the open market and a decrease intaxes C.The sale of government securities in the open market and a decrease in government spending D. The purchase of government securities in the open market and an increase in government spending... Explain.

Explanation / Answer

Answer:
B. The sale of government securities in the open market and a decrease in taxes.

Reasoning:
As prices are stable as per condition.so if government sales its securities and brings a decrease in taxes then people having high incomes would definitely be able to do savings thereby investing them,which would definitely create jobs in firms/industries/any sector(where investement has been done) and the people would get employments inturn reducing the unemployment rate.

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