Identify two policies that the federal government can follow in order to make the business cycle less disruptive.
Policy 1: Allowing the market forces of supply and demand to set prices.
- The government market regulations that follow a free market principle are less disruptive, since these regulations give autonomy for business people to consider their business context to set their own prices.
Policy 2: make an effort to get low taxes for international trade.
- Free trade agreements treaties became a crucial tool for governments to get low taxes for international trade. A FTA facilitates and eliminates trade barriers, creating an international competitive market. Some treaties allowed, not only low international trade taxes, but also workers to move more freely between neighbor countries.
