2. Reduced taxes
Congress can also reduce taxes and levies, leaving more money for households and businesses to spend. Tax cuts have been a popular measure for encouraging increased economic activity since the Economic Recovery Tax Act of 1981 was credited with helping to curb a sharp recession by significantly lowering marginal income tax rates.
3. Transfer payments
Direct payments to individuals are among the most popular and fast methods for increasing economic activity. Most transfer payments are fixed: Social Security payments, unemployment insurance, and benefits for participants in the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps).
But in several instances when the economy has shown signs of major weakness, policymakers have approved direct payments to taxpayers. The economy fell into a deep tailspin during the Great Recession, causing Congress to pass the Economic Stimulus Act of 2008, which authorized payments of as much as $600 per individual taxpayer or $1,200 per household.