One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money.
B. by increasing government spending.
C. by setting price ceilings on most goods so people can afford them.
D. None of these will help an economy in recession.
Answer: B
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The increasing oil prices during 2004-2008 show OPEC's power to overcome market pressures for declining prices.
Answer the following statement true (T) or false (F)
All of the following statements about the free market equilibrium output are equivalent except:
a. Total surplus is maximized. b. There is zero dead-weight loss. c. There are no allocations that a Pareto preferred. d. There is positive dead-weight loss.
During an economic downturn, Keynes argued that businesses would:
A. not increase spending because of the sharp rise in interest rates. B. not increase spending even if interest rates fell all the way to zero. C. increase spending because interest rates would fall to zero. D. increase spending because of the sharp rise in interest rates.
The substitution effect makes workers want to work less when the wage increases
a. True b. False Indicate whether the statement is true or false