Question

How can government stimulate economy?

Answer 1

Because economic stimulus consists of attempts by governments or government agencies to financially stimulate an economy. A economic stimulus is the use of monetary or fiscal policy changes to kick start growth during a recession.

Answer 2

The most common thing the government can do to stimulate economy is lower interest rates. There can also be tax cuts, both these options are good for helping people get a few extra bucks in their pockets, with hopes of them spending it and getting more money flowing in the economy.