Suppose an economy is experiencing recession. From the list below, select two (2) policy tools that the government can use to restore the economy back to a long-run macroeconomic equilibrium.Note: if you select more than two policy tools, 1 point will be taken for each additional choice. A.The government can decrease income taxes. B.The government can increase interest rates. C.The government can increase government spending. D.The government can send optimistic messages to boost expectations. E.The government can expand the resource base.

Recession is an general decline in the economic activities. It occurs when there is a decline in…

Answered: Suppose an economy is experiencing…

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter26: Monetary Policy

Section26.A: Policy Disputes Using The Self Correcting Aggregate Demand And Supply Model

Problem 10SQ

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Suppose an economy is experiencing recession. From the list below, select two (2) policy tools that the government can use to restore the economy back to a long-run macroeconomic equilibrium.

Note: if you select more than two policy tools, 1 point will be taken for each additional choice.

	A.	The government can decrease income taxes.
	B.	The government can increase interest rates.
	C.	The government can increase government spending.
	D.	The government can send optimistic messages to boost expectations.
	E.	The government can expand the resource base.

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