What the federal government will most likely do to stabilize the economy during a recession is to significantly change its spending.
In essence, some of the several attempts by the federal government to financially stimulate the economy during a recession is known as Economic stimulus.
Further Explanation
Economic stimulus refers to the use of monetary policy changes by the government to stabilize the economy during a recession.
The government can utilize different strategies to stabilize the economy financially during a recession by reducing the interest rate, increasing its spending and many more.
Economic recession is when there is a decline in the general economy of a country and it is usually associated with different factors which include:
- A drop in the stock market
- A significant increase in unemployment
- A decline in the housing market
- A decline in Gross domestic product
- High inflation
Some of factors that causes inflation include
- High interest rate: high interest rate limit liquidity, that is, that won’t be enough money to invest
- Inflation: this is when the prices of goods and services are high generally over a period of time
- Reduced real wages: this implies the paycheck of workers can no longer sustain them.
- Reduced consumer confidence: consumers can decide not to spend money if they perceived the economy to be bad and this can also lead to inflation.
LEARN MORE:
- During a recession, what will the federal government MOST LIKELY do to stabilize the economy? https://brainly.com/question/10135250
- Which tool would the government most likely employ during a period of infilation to stabilize the economy https://brainly.com/question/11439999
KEYWORDS:
- economic stimulus
- recession
- federal government
- inflation
- goods and services
- high interest rate
