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How would a government most likely respond to a slowdown in the economy?
Lowering taxes in order to stimulate spending
How would the government Respond to a slowdown in economy?
Stop printing money.
What were Ronald Reagan's Economic policies?
Ronald Reagan's economic policies were labeled "Reaganomics." Reaganomics is the idea of controlled government spending and the lowering of taxes of people of all economic brackets to cause the multiplier effect and generate economic activity.
What ways does the government uses taxes and spending to stabilize the economy?
Taxes are a needed evil. They NEVER help an economy. They can prevent one from growing. They can be used to slow an economy. Taxes hurt the people that pay them. A over taxed economy fails. A heavily taxed economy slows to stagnation. If you want to kill an economy and change the direction of a country, step one is tax it to death.
How can open market operations expand the economy?
An open market policy can be used to stimulate the economic activity by increasing the money supply, lowering the interest rates and the change in reserve banks.
