In Neoclassical economic models, government intervention is necessary to stabilize the economy during recessions.Question 18Answera.Trueb.False

Recession is the result of:Select one:a.Globalizationb.Sub-Primesc.Economic Systemd.Subsidies

Fill in the Blank QuestionFill in the blank question. stabilizers are provisions that change the levels of spending in the economy without any government intervention.

According to Keynesian economics, during periods of recession, the government should:  A. Decrease public spending to reduce deficits  B. Implement austerity measures  C. Increase taxes to boost government revenue  D. Increase government spending to stimulate demand

To ameliorate the effects of a​ recession, a government could enact appropriate policies​ including: a. increasing government purchases. b. decreasing defence spending. c. increasing tax rates d. increasing taxes by a fixed amount.

An increase in government spending may expedite recovery from a recession in the short​ run, but in the long​ run, this policy​ may: a. raise interest rates and reduce consumer expenditures on cars and new houses. b. make domestic businesses less competitive in international markets if the dollar appreciates in value. c. reduce investment in new capital. d. All of these options are correct.