Advocates of stabilization policy argue that when there is a recession, the government should decrease the money supply and increase government expenditures.

Question

Quizplus · Accepted Answer

Advocates of stabilization policy argue that the government should increase the money supply and decrease government expenditures during a recession. This is because increasing the money supply can stimulate spending and investment, and decreasing government expenditures can reduce crowding out of private investment.

Advocates of Stabilization Policy Argue That When There Is a Recession