The Government Might Increase Its Spending to End a Recession

question 176

Multiple Choice

The government might increase its spending to end a recession because:

• A) allowing the short-run aggregate supply to adjust since back to the long-run can take a long time.
• B) the economy experiences lower prices at the long-run equilibrium.
• C) the economy enjoys a higher level of output in the long run.
• D) None of these justify why the government might change its spending to end a recession.