Economists Are Sharply Divided Over How to Best Fight the Great

question 65

Multiple Choice

Economists are sharply divided over how to best fight the Great Recession. A vocal minority of economists favor the "Structural Solution," arguing that the economy needs to undergo some structural adjustments and:

• A) Relying on the invisible hand of the market to reallocate resources, by letting weak firms die out quickly
• B) Government taking serious actions to increase the total demand for output in the economy
• C) Fixing prices so that consumers can afford the basic stuff they need, and also to control inflation
• D) Setting up social programs and welfare structures, to help out those who are suffering most from the recession

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Definitions:

Budgeting

The process of creating a plan to spend your money, outlining projected income versus expenses for a given period.

Employee Motivation

The techniques and strategies employed by businesses to encourage their employees to perform their best and remain engaged and satisfied with their work.

Budgeting

The process of creating a plan to spend your money, which involves estimating revenues and outlining planned expenditures.

Merchandise Purchases Budget

A financial plan that estimates the amount of inventory a company needs to buy to meet sales needs for a future period.