When recessions are the result of slowing growth in potential output, the government's best policy is to:

A. decrease aggregate supply.
B. promote saving and investment.
C. reduce government spending.
D. increase aggregate demand.


Answer: B

Economics

You might also like to view...

Refer to A Negative Externality Problem. According to Pigou, the socially optimal level of production is

Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. 0 units. b. 30 units. c. 40 units. d. 45 units.

Economics

In the United States, who determines monetary policy? What is the major tool used to determine monetary policy?

What will be an ideal response?

Economics

Refer to the Article Summary. Based on the difference between the face value of Super Bowl tickets and the prices being charged in the resale market, the demand at the face value of the tickets is

A) elastic. B) unit elastic. C) inelastic. D) perfectly elastic.

Economics

An increase in Mexican incomes will have what effect on the foreign exchange market for Mexican pesos?

a. shift demand to the left b. shift demand to the right c. no effect d. shift supply to the left e. shift supply to the right

Economics