Many economists believe that increases in government spending were necessary to help the Canadian economy recover from the recession of 2008-2009.Neils Veldhuis and Charles Lammam, on the other hand, believe that the recovery was due to
A)increases in net exports.
B)decreases in the price level.
C)increases in private spending.
D)a fall in potential GDP.
E)workers accepting much lower wages.

Question

Quizplus · Accepted Answer

Neils Veldhuis and Charles Lammam believe that the recovery was due to increases in private spending. This is supported by the fact that consumer spending and business investment both increased in the years following the recession, which helped to stimulate economic growth. Increases in government spending may have also played a role, but Veldhuis and Lammam argue that private sector activity was the primary driver of the recovery. None of the other options listed are considered to be major contributors to the recovery of the Canadian economy from the 2008-2009 recession.

Many Economists Believe That Increases in Government Spending Were Necessary