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Updated on: 02 Oct 2023, 14:09
Originally posted by Sajjad1994 on 30 Oct 2020, 23:36.
Last edited by BottomJee on 02 Oct 2023, 14:09, edited 2 times in total.
Last edited by BottomJee on 02 Oct 2023, 14:09, edited 2 times in total.
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Action: Country X’s government increases spending on infrastructure and raises interest rates.
Prediction: Country X’s recession will worsen.
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
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Economist: When a country is in a recession, fiscal austerity measures, such as cuts to public services and pensions, especially when coupled with higher taxes, exacerbate a country’s recession instead of helping the country move out of the recession. It is exactly when an economy is hurting that government should pursue expansionary policies, such as increasing government spending or lowering interest rates, even at the risk of higher inflation. If County X is in a recession, then the economist suggests that a certain type of prediction about the country can be made based on a certain action by the country’s government.
In the table, indicate the possible action and prediction that most strongly conform to the economist’s suggestion. Make only two selections, one in each column.
In the table, indicate the possible action and prediction that most strongly conform to the economist’s suggestion. Make only two selections, one in each column.
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| Action | Prediction | |
| Country X’s government keeps its interest rates low. | ||
| Country X’s government cuts the salaries of public sector employees and increases real estate taxes. | ||
| Country X’s government increases spending on infrastructure and raises interest rates. | ||
| Country X’s recession will be alleviated. | ||
| Country X’s inflation will increase. | ||
| Country X’s recession will worsen. |
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Action: Country X’s government increases spending on infrastructure and raises interest rates.
Prediction: Country X’s recession will worsen.
yashikaaggarwal
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17 Oct 2021, 11:13
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Increasing Inflation is a risk, not a definite future.
So the prediction that will be made is upon the alleviation of the Country's recession.
For alleviating the recession, the government need to lower its interest rates.
So,
Action: Country X’s government keeps its interest rates low.
Prediction: Country X’s recession will be alleviated.
Posted from my mobile device
So the prediction that will be made is upon the alleviation of the Country's recession.
For alleviating the recession, the government need to lower its interest rates.
So,
Action: Country X’s government keeps its interest rates low.
Prediction: Country X’s recession will be alleviated.
Posted from my mobile device
24 Apr 2024, 21:38
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KarishmaB chetan2u
I am not sure, why my answer is wrong. Please help here..
I marked 1-B, 2-F, because rule says: When a country is in a recession, fiscal austerity measures, such as cuts to public services and pensions, especially when coupled with higher taxes, exacerbate a country’s recession instead of helping the country move out of the recession.
So, if, in recession, you go for austerity measures ---> then you exacerbate the problems
I am not sure, why my answer is wrong. Please help here..
I marked 1-B, 2-F, because rule says: When a country is in a recession, fiscal austerity measures, such as cuts to public services and pensions, especially when coupled with higher taxes, exacerbate a country’s recession instead of helping the country move out of the recession.
So, if, in recession, you go for austerity measures ---> then you exacerbate the problems
