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Active Economic Policy
Government interventions aimed at influencing the economy through measures such as fiscal and monetary policies to achieve specific macroeconomic objectives.
Law of Diminishing Returns
An economic principle stating that adding an additional factor of production results in smaller increases in output after a certain point.
Rational Expectations
A school of thought that argues people form expectations based on all available information, including the likely future actions of government policymakers.
Expansionary Monetary Policy
A strategy employed by central banks to increase the money supply and decrease interest rates to stimulate economic growth.
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