Explain how a "conservative" and a "liberal" might differ in the types of policies they advocate to counteract a recessionary gap

Conservatives tend to want a smaller government sector. In such a case, expansionary fiscal policy would take the form of tax cuts. This would diminish the size of the government's share of total income. The aggregate demand curve would shift outward due to an increase in private spending, namely consumers and businesses. Liberals usually tend to favor an expanded government sector. In such a case, expansionary fiscal policy would call for an increase in government spending. This increase in the government's share of the economy would shift the aggregate demand curve outward by increasing the production of public goods and services, such as education or public health care.