During a recession, what is one way governments try to encourage growth?

During a recession, what is one way governments try to encourage growth?

(a) by increasing unemployment benefits.

(b) by requiring firms to maintain production.

(c) by stopping government spending.

(d) by eliminating all tax breaks.

(b) by requiring firms to maintain production.

Such fiscal and monetary policies like expansionary are pursued by the governments during the recession to give a boost to growth. One of the policy tools is to increase government spending on infrastructural or social projects or any other projects which can lead to income generation and the creation of jobs. Also, governments may decide to cut the rates of interest or offer consumers duty rebates or other incentives to increase the rate of interest and investments. The use of production requirements is therefore neither possible nor sensible because it goes against the idea of the free market system and it may cause economic inefficiencies and distortions. It envisions establishing the right institutional framework that supports economic growth by implementing specific economic policies instead of seeking administrative order for production on the side of private enterprises.