Question
Asked Nov 6, 2019
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A) Explain thoroughly how reducing recession works

 

B) Explain why the presence of the built-instabilizer is important to managing the macroeconomy.

 

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Expert Answer

Step 1

Hi there! Thank you for submitting the question. Since we only answer one question, we will answer the first question

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Recession refers to a significant fall in GDP for two consecutive quarters due to decline in economic activity. The production process ceases to expand, and unemployment rises.

Step 3

One of the major causes of recession is inflation. Factors such as high cost of production, national debt, etc., lead to inflation. As to curtail rising costs, firms tend to lay off workers, increasing unemployment. And with th...

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