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When bad things happen, we become more cautious with our spending, which causes further harm to the economy. The effects of a recession in one economy can spread quickly across international borders. The government has two ways to try to correct recessions and avoid the constant business cycle of growth and reduction...
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The government has two ways to try to correct recessions and avoid the constant business cycle of growth and reduction. They are fiscal policy, which uses taxes and spending techniques by the government, and monetary policy, which raises or lowers short-term interest rates. They both encourage consumers and business to spend and invest again...
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