During an economic recession, the government usually takes steps to stimulate the economy and increase demand. Option 2, i.e. an increase in expenditure on public projects, is the most likely step to be taken at the time of an economic recession.

Explanation:

A cut in tax rates accompanied by an increase in interest rates would reduce government revenue and increase the cost of borrowing, which would not be helpful in stimulating the economy during a recession. Hence, this option is incorrect.

An increase in expenditure on public projects would create jobs, increase demand for goods and services, and stimulate economic growth. This option is the most likely step to be taken at the time of an economic recession.

An increase in tax rates accompanied by a reduction of interest rates would reduce consumer spending and investment, which would not be helpful in stimulating the economy during a recession. Hence, this option is incorrect.

A reduction in expenditure on public projects would reduce demand, which would not be helpful in stimulating the economy during a recession. Hence, this option is incorrect.

Therefore, option 2, i.e. an increase in expenditure on public projects, is the most likely step to be taken at the time of an economic recession.