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Fiscal Policy During The 2008-2009 Recession

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During the 2008-2009 recession, the nation experienced its economy downturn. The United States government jump-start the economy using spending policies.

The government has the power to lower or increase taxes and can spend by purchases to promote the level of production output to stabilize the economy. The government stepped in and intervened using fiscal policy, a method known as Keynesian economics. The fiscal policy allows the government to adjust spending level, and tax rate. For example, in 2008-2009, because the effect of the recession was nationwide, President Obama administration used massive stimulus package to engineer the economy recovery (Schmidt, et al. 2010-11). It was a financial crisis that economists expected would stay for
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