One of the potential economic problems associated with the extensive use of macropolicy to recover from the Great Recession is

A) the huge government deficits will cause increasing interest rates which could choke off the recovery..
B) the large amount of government spending for job creation could result in rapid and uncontrollable increases in wages.
C) the flood of money into the banks could cause excessive investment expenditures in the economy.
D) the tax rebates made available to consumers could cause uncontrollable increases in the price of housing.

Question

William Roddy · Accepted Answer

Final Answer : A, Explanation :  Extensive use of macropolicy to recover from the Great Recession has led to huge government deficits which could cause increasing interest rates. High interest rates could potentially choke off the recovery by discouraging borrowing, investments, and consumer spending.

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