Under which circumstance should an economic advisor for a small economy recommend a large increase in government spending?
A) The country is in a recession that seems to be turning into a depression.
B) The government has a record high budget deficit.
C) It has become more difficult for the government to sell bonds.
D) The economy is struggling primarily because of high oil prices.

Question

Quizplus · Accepted Answer

During a recession that has the potential to turn into a depression, an economic advisor may recommend a large increase in government spending to stimulate economic growth and create jobs. This increase in spending can help to boost aggregate demand in the economy and prevent a deepening of the recession. However, it is important to note that government spending should be accompanied by careful planning and targeted investments to ensure that the spending is effective and efficient.

Under Which Circumstance Should an Economic Advisor for a Small