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Lower Interest Rates
A monetary policy strategy where central banks reduce the cost of borrowing money in an effort to stimulate economic growth.
Crowding Out
A situation in which increased government spending leads to a reduction in private sector spending and investment.
Contractionary Gap
A situation where an economy's real GDP is lower than its potential GDP, indicating underutilization of resources.
Cyclically Balanced
An economic situation where fiscal policy is designed to be neutral over the business cycle, allowing for temporary deficits or surpluses but aiming for a long-term balance.
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