The government might increase its spending to end a recession because:
A)allowing the short-run aggregate supply to adjust back to the long-run can take a long time.
B)the economy experiences lower prices at the long-run equilibrium.
C)the economy enjoys a higher level of output in the long run.
D)None of these justify why the government might change its spending to end a recession.

Question

Quizplus · Accepted Answer

Allowing the short-run aggregate supply to adjust back to the long-run can take a long time, and increasing government spending can help to mitigate the effects of a recession in the short run.

The Government Might Increase Its Spending to End a Recession