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Category > Economics Posted 03 May 2017 My Price 9.00

deep recession

Q: "To avoid a deep recession, the government decides to run an expansionary fiscal policy.

A. What increase in discretionary spending would restore the initial level of real GDP?

B. What expansion of entitlement programs would restore the initial level of real GDP?

C. If central government took no action, what could the Central Bank of Flavonia do to help avoid the recession?"

 

 

A: Tax cuts and increased government spending?

B: Unemployment income, other subsidies for high unemployment, low wages?

C: They could lower the lending rate (federal funds rate) to increase borrowing and spending by firms/banks? They could also buy up Flavonia debt (bonds)?

Answers

SuperTutor
(15)
Status NEW Posted 03 May 2017 01:05 AM My Price 9.00

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