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Circulation of money is critical to a healthy economy. In a recession, financial hardship causes people to spend less money, which leads to fewer goods being produced, fewer jobs available, and people earning and spending even less money. That is why (somewhat counter-intuitively) governments need to spend ''more'' money during a recession in order to infuse money back into the economy and get it circulating again. The Federal Reserve lowering interest rates is also a planned, strategic move to increase the money supply, which encourages investment and economic growth. | Circulation of money is critical to a healthy economy. In a recession, financial hardship causes people to spend less money, which leads to fewer goods being produced, fewer jobs available, and people earning and spending even less money. That is why (somewhat counter-intuitively) governments need to spend ''more'' money during a recession in order to infuse money back into the economy and get it circulating again. The Federal Reserve lowering interest rates is also a planned, strategic move to increase the money supply, which encourages investment and economic growth. | ||
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====Stocks==== | ====Stocks==== |