(solution) Describe three alternative responses available to policymakers when the economy is in recession….

(solution) Describe three alternative responses available to policymakers when the economy is in recession….

Describe three alternative responses available to policymakers when the economy is in recession. What are the advantages and disadvantages of each strategy? Be sure to discuss the effects on employment, the price level, and the composition of output. What are some of the practical difficulties in using macroeconomic stabilization policies to fight recessions?