Please read over the details, provide great facts answering each part. The next time the economy falls into a recession, there will be a spirited debate about whether the government should try to counteract the downturn, or whether it is better to let the economy run its course. Most likely, there will be some action taken to try to improve the economy. Then the debate will turn to what tools the government should use to fight the recession. In this week’s discussion we will focus on (1) what role the government should play in stabilizing the economy, and (2) what tools they should use if the government does step in. Please respond to both of the following questions in your initial post:
1.Assume the economy has entered a recession and policymakers are debating whether to intervene or not. What are arguments in favor of and against active government intervention to fight recessions? Be sure rely the economics we learned this week in your summaries.
2.Now assume that the decision has been made to try and fight the recession. Based on the economics we learned this week, provide a recommendation to policymakers about how they should fight the recession. That is, in your professional economic opinion, what is the best approach? You may want to consider the following in your response. Should we use fiscal policy, monetary policy, or both? Should we use tax cuts, increased spending, or both? Who should get the biggest tax cuts to stimulate the economy – poor vs rich, evenly across income groups? Be sure to explain why you believe your recommendation is the best, again, using the economics you have learned.
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