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The economy is in a severe recession. The government should ?

User MattyV
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2 Answers

2 votes

Answer: Increase spending

Explanation: When the economy is in severe recession, it usually means there is inflation, depreciation of money, reduced demand, unemployment. In order to change that, and the economy to come out of recession, work needs to be done to increase spending, as part of fiscal policy. This can be achieved by reducing taxation, as an incentive for government spending, which would create conditions for increased demand and thus increase production, which is a key factor for improving the economy, which consequently means increasing employment.

User Amal Gunatilake
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government should increase spending and/or cut taxes to increase demand.
User Veilupearl
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