Politics

Question

Question 4 (10 points)

In a severe recession, macro-policy makers are likely to:

Use both expansionary fiscal policy and contractionary monetary policy to bring

an end to the recession without igniting inflation problems.

None of the statements are correct.

Use both expansionary monetary policy and expansionary fiscal policy to bring

an end to the recession as quickly as possible.

Use both expansionary monetary and expansionary fiscal policy to increase

output and employment and decrease price inflation.

C

Use expansionary monetary policy to lower interest rates and simultaneously

deregulate businesses to increase output and employment as quickly as possible.

Answer

None of the statements are correct. In a severe recession, macro-policy makers are likely to use both expansionary fiscal policy and expansionary monetary policy to increase output and employment and decrease price inflation.

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During a severe recession, the economy experiences a significant decline in output and employment, and prices may also fall. To address these issues, macro-policy...