Economist: When a country is in a recession, fiscal austerity measures

Economist: When a country is in a recession, fiscal austerity measures, such as cuts to public services and pensions, especially when coupled with higher taxes, exacerbate a country’s recession instead of helping the country move out of the recession. It is exactly when an economy is hurting that government should pursue expansionary policies, such as increasing government spending or lowering interest rates, even at the risk of higher inflation. If County X is in a recession, then the economist suggests that a certain type of prediction about the country can be made based on a certain action by the country’s government.

In the table, indicate the possible action and prediction that most strongly conform to the economist’s suggestion. Make only two selections, one in each column.

Action	Prediction
		Country X’s government keeps its interest rates low.
		Country X’s government cuts the salaries of public sector employees and increases real estate taxes.
		Country X’s government increases spending on infrastructure and raises interest rates.
		Country X’s recession will be alleviated.
		Country X’s inflation will increase.
		Country X’s recession will worsen.