2.

Discuss four measures that can be taken by Caribbean Governments to promote Economic
Growth during a recession

Recession is a period of time during which there is negative economic growth. Possible causes
for recessions in the Caribbean include: Inflation (that is, a gradual increase in the prices of
goods and services due to increased production costs, national debts and higher energy costs) and
problems that have a negative impact on tourism, business sectors of the Caribbean. Despite
these implications, the Caribbean can take measures to combat these negatives. These include:
Economic wage freezes, Reducing povertyI, implementing lower interest rates and finding
alternatives for sectors that are causing the recession.

Firstly, by enforcing economic wage freezes this allows the country to come out on the other side
financially stronger. Not to mention, wage freezes can help countries avoid unwanted layoffs.
Despite it being controversial to the higher earners of the country, it is generally done for the
betterment of the country and to increase stability and stimulate economic growth within a
recession. In Barbados in 2013, there were layoffs and a wage freeze for civil servants. They also
scaled back on the universal government programmes to leave out higher income groups. By
doing these actions, not only did they prevent unnecessary layoff of important income groups
and social workers, this in turn would help to become more economically stable and be back on
the path of economic growth and not recession.

Secondly, improving government spending in poverty reduction is a great way to push economic
growth from recession. By doing this, the government will be allocating more money to get
people of the nation who were unable to get housing before, due to employment etc. and thus
brings about a multiplier effect since they would now see a gradual reduction in extreme poverty.
With this, it bears the chance for more children to get an education since they would no longer be
on the road begging for a living and a chance to become a part of the labor force of their country
of origin. In the gross domestic product (gdp) growth of an economy labor seems to be an
important input. Therefore, a country's economic growth depends mainly on labor supply.

Furthermore, another measure that the Caribbean governments can take to push economic
growth from a recession is lowering the interest rates on goods and services. By implementing
this strategy, money supply will increase and therefore, consumers will spend more money on
the goods and services since it is available to them. Increased consumer spending means an
increase in demand and increases in demand increase prices. This also means more money will
begin being pumped into the economy which could be used to improve facilities, the roads,
education system, stable housing schemes etc thus making the economy develop even more.

Finally, creating alternatives or counter measures for sectors that are causing the recession also
can improve economic growth. By examining the sources of reduction in output, governments
can build counter measures to improve and higher the output value. For example, if the tourism
sector is the defect, the government would create remedies and alternatives such as tourist
markets or to diversify from main exports to higher value goods.This would mean that the
country/government now has multiple ways of gaining money from the tourism sector rather
than just relying on one sole/main export.

Conclusively, the Caribbean government is able to implement many measures, though

controversial at times, to promote economic growth. These measures include: Enforcing wage
freezes on on higher earners within the Caribbean country, Reducing poverty, lowering interest
rates and using other alternatives for defective sectors that bring about recession within the
Caribbean country.