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Move an economy out of recession

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Reference no: EM131994475

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: EM131994475

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