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Approaches government can take to move an economy

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Reference no: EM132001421

Keynesian theory tells us that there are three approaches government can take to move an economy out of recession:

- Reduce interest rates

- Reduce taxes

-Increase government spending.

However, in practice these approaches may not work. For each approach, discuss:

1. How is it supposed to work ( i.e., its strengths as a policy tool)

2. Why it might not work (i.e.,its weaknesses as a policy tool).

Reference no: EM132001421

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