Which among the following steps is most likely to be taken at the time of an economic recession?

1. An economic recession is characterized by a significant decline in economic activity. Governments and central banks typically implement expansionary policies to counteract it. 2. Option (A) involves a cut in tax rates (expansionary fiscal policy) but an increase in interest rate (contractionary monetary policy). These are conflicting measures, making it less likely. 3. Option (B) suggests an increase in expenditure on public projects. This is a standard expansionary fiscal policy tool (fiscal stimulus) used during recessions to boost aggregate demand, create jobs, and stimulate economic growth. This is the most likely step. 4. Option (C) involves an increase in tax rates (contractionary fiscal policy) and a reduction of interest rate (expansionary monetary policy). These are conflicting measures, making it less likely. 5. Option (D) suggests a reduction of expenditure on public projects. This is a contractionary fiscal policy (austerity) which would likely worsen a recession by further reducing aggregate demand. This is unlikely to be taken during a recession.