Q1- Investors demand that Portugal’s Jose Socrates and other leaders make big sp
ID: 1131837 • Letter: Q
Question
Q1- Investors demand that Portugal’s Jose Socrates and other leaders make big spending cuts. However, Socrates and other socialist prime ministers would prefer to generate economic growth via government spending? which approach is likely to be the most effective?
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( Policies that are taken by Socrates and Zapatero tend to follow Keynesians point of view, which mainly states that optimal economic performance could be achieved–and economic slumps prevented–by influencing aggregate demand through activist stabilization and economic intervention policies by the government.)
Explanation / Answer
Answer:
As per the policies made by them, optimal economic performance could be achieved through activist stabilization and economic intervention policies by the government which can influence the aggregate demand. This can also prevent economic slumps.
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