Question

Analyse and evaluate two ways in which the government intervention is able to avoid the worst...

Analyse and evaluate two ways in which the government intervention is able to avoid the worst aspects of a financial crash.

Homework Answers

Answer #1

Following are two ways in which the government intervention can help in avoiding the worst aspects of a financial crash:

1. Bailing out firms to stop domino effects: Government can bail out large firms or financial institutions facing bankruptcy. This helps in restoring the confidence of public and investors in the market, business firms, and financial institutions. This also helps in averting a larger crisis and snowball effects. Restoring confidence can help in recovering from the finanical crisis.

2. Saving jobs and reducing unemployment: Increasing government expenditure helps in increasing the aggregate demand (AD) which in turn helps in increasing output. This creates jobs, increases employment level, and increases income. Therefore, government intervention can help create jobs and help people avoid economic hardships.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Economists often discuss two ways of thinking about the economy – 1) Laissez-faire doctrine (opposes government...
Economists often discuss two ways of thinking about the economy – 1) Laissez-faire doctrine (opposes government intervention into the economy beyond a minimum) and 2) Keynesian economics (the government and private businesses both play important roles in maintaining a desired economic system). Which economic viewpoint do you favor, Laissez-faire or Keynesian? Please explain with an example.
Which theories of trade support government intervention in trade? Name them and briefly discuss their rationale...
Which theories of trade support government intervention in trade? Name them and briefly discuss their rationale for supporting government intervention.
What are 3 ways by which bacteria can overcome, evade or avoid phagocytosis? 3pts
What are 3 ways by which bacteria can overcome, evade or avoid phagocytosis? 3pts
Which of the following are examples of inefficiencies created by government? intervention? ?(Check all that apply?.)...
Which of the following are examples of inefficiencies created by government? intervention? ?(Check all that apply?.) A. Quality deterioration in a market after government implements a price control. B. Causing a rise in inflation due to an expansionary fiscal policy of the government. C. Creating a large workforce of professionals who review whether the financial reports of companies are true and fair. D. An increase in the price of alcohol due to higher taxes imposed by the government. Which of...
Discuss in detail two ways bacteria endonucleases distinguishes viral DNA from their own DNA to avoid...
Discuss in detail two ways bacteria endonucleases distinguishes viral DNA from their own DNA to avoid self-destruction of their DNA.
How are the ways in which organizations choose to measure and evaluate the performance of their...
How are the ways in which organizations choose to measure and evaluate the performance of their segments tied to how managers of those segments get evaluated? What are the ways those approaches can fairly evaluate managers? How can those approaches sometimes unfairly evaluate managers? Can people "game" this system? If so, how? What can be done to ensure both accurate segment performance evaluation and fair manager evaluation?
As a professional nurse, what are some ways in which you are able to reach out...
As a professional nurse, what are some ways in which you are able to reach out to members of the community who do not have access to healthcare reform?
Identify and discuss at least two ways you might be able to use the time value...
Identify and discuss at least two ways you might be able to use the time value of money calculations in your personal life.
Identify and discuss at least two ways you might be able to use the time value...
Identify and discuss at least two ways you might be able to use the time value of money calculations in your personal life.
Identify and discuss at least two ways you might be able to use the time value...
Identify and discuss at least two ways you might be able to use the time value of money calculations in your personal life.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT