Question

Give an account of how money is involved in the occurrence and recovery from recessions.

Answer 1

Money is greatly involved in the occurrence and recovery from recession

• Cutting interest rates on money can reduce cost of borrowing and increase investment
• Bank deposits and store of money during recession can maintain credibility in the banking system
• Helicopter money policy can increase the money supply and give money directly to consumers after the recession
• It allows people to secure their jobs after recession
• It relieves people from unemployment fall after recession
• Fiscal policy of money provides comfort to the economy from outcomes of recession
• The banks improve conditions for small businesses by lending money as a process of recovery.