Economists were sharply divided over how to best fight the Great Recession. A vocal minority of economists favored the "Structural Solution," arguing that the economy needs to undergo some structural adjustments and that government should, therefore, A. rely on the invisible hand of the market to relocate resources, by letting weak firms die out quickly B. take serious actions to increase the total demand output for the country

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Business

Matthew Jennings

5 April, 01:25

Economists were sharply divided over how to best fight the Great Recession. A vocal minority of economists favored the "Structural Solution," arguing that the economy needs to undergo some structural adjustments and that government should, therefore, A. rely on the invisible hand of the market to relocate resources, by letting weak firms die out quickly B. take serious actions to increase the total demand output for the country

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Madilynn Maldonado · Answer 1

Answer: A - Rely on the invisible hand of the market to relocate resources, by letting weak firms die out quickly.

Explanation:

The economists strongly believed that the smaller businesses should go out of business. By going out of business this would make them bankrupt. By going bankrupt, this would make the economy correct the resource misallocations.

The advocates for this solution also wanted the taxes to be cut. They wanted across the board tax cuts. They believed that this would get the demand for the goods and other services in high demand with the public.