Asked by Jacob Willard on Jun 07, 2024
Verified
One of the potential economic problems associated with the extensive use of macropolicy to recover from the Great Recession is
A) the huge government deficits and the flood of money into the banks could set off an inflationary spiral.
B) the large amount of government spending for job creation could result in rapid and uncontrollable increases in wages.
C) the flood of money into the banks could cause excessive investment expenditures in the economy.
D) the tax rebates made available to consumers could cause uncontrollable increases in the price of housing.
Inflationary Spiral
A situation where prices increase continually as demand outstrips supply, often leading to rapidly increasing inflation.
Macropolicy
Strategies and interventions by the government to regulate and control the economy as a whole, affecting macroeconomic variables such as inflation, unemployment, and national income.
Great Recession
The Great Recession refers to the global economic downturn that occurred from 2007 to 2009, marked by significant financial crises, high unemployment, and contraction in the world economy.
- Comprehend the effect of monetary and fiscal strategies on aggregate demand levels.
Verified Answer
Learning Objectives
- Comprehend the effect of monetary and fiscal strategies on aggregate demand levels.
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