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Essay

Government Expenditures In Recession

Essay specific features

 

Issue:

Business

 

Written by:

Virgil B

 

Date added:

May 8, 2017

 

Level:

University

 

Grade:

A

 

No of pages / words:

5 / 1260

 

Was viewed:

6303 times

 

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Essay content:

The government is able to do this because their actions do not have a significant impact on the demand or supply for money. Demand for money is defined by interest rates (Federal Funds Rate) which is controlled by the central bank (a bank which operates independently from the central government to control the value of money) and Supply is also controlled the central bank (the means by which is out of the scope of this paper)...
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The money which the federal government spends is all of money which is collected in taxes and is part of the money supply in the country (therefore this money cannot change the supply of money in the country because it is already part of the supply, only the central bank can control money supply). Since there government doesn’t have to worry about inflation with expenditures it can focus on generating consumer demand to bring the economy back to life and it does this by spending money...
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General issues of this essay:
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