The austerity plan required of the Greek government is a(n)________ policy, when normally a recession would suggest ________ policy.

Question

Quizplus · Accepted Answer

The austerity plan required by the Greek government involves reducing government spending and increasing taxes to reduce the budget deficit, which is contractionary. In a recession, the usual policy prescription is expansionary, involving increasing government spending and lowering taxes to boost the economy.

The Austerity Plan Required of the Greek Government Is A(n)________