Question

In your opinion, should the government have a role in bailing out corporations and banks? Explain your answer with examples from the reading.

Key terms to use: bailout, speculative bubble, recession

Answer 1

The government should have a role of Bailing out corporations and banks because this will avoid a recession. If the government does not bail the banks out a bank-run may resulting in the speculative bubble of the economy popping and causing a depression. If the government does not bail out corporations neccessities may not be supplied. If farmers are not earning enough money from crops and they all begin to go bankrupt the government must step in or there will be a massive escalation in simple food prices.