If a recession hits Potentia,its government can stimulate the economy by ________.
A) lowering its expenditure
B) lowering the money supply
C) imposing new taxes
D) lowering interest rates

Question

Quizplus · Accepted Answer

Lowering interest rates can encourage businesses to borrow money and invest in expansions, which can then create jobs and increase spending in the economy. This can stimulate growth and pull the country out of a recession. Lowering government expenditure or imposing new taxes can stifle economic activity and make it harder for businesses and individuals to spend or invest. Lowering the money supply can lead to deflation and further economic contraction.

If a Recession Hits Potentia,its Government Can Stimulate the Economy