What is a likely outcome of increased government spending in a recession?

Increasing government spending during a recession is a commonly used fiscal policy aimed at stimulating the economy. When the government injects additional funds into the economy, it typically increases overall demand for goods and services. This heightened demand can encourage businesses to ramp up production, which may lead to more hiring and ultimately reduce unemployment levels.

As consumers find work or secure more hours due to increased business activities, their confidence in the economy can also improve, potentially leading to increased consumer spending. This cycle of increased demand and economic activity plays a critical role in promoting economic recovery.

The other options present various considerations, but they do not align with the primary economic principle that increased government spending during a recession serves to stimulate demand and facilitate recovery.