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Which of the following indicates the most basic solution?
Fiscal Policy
Manipulation of the federal budget to attain price stability, relatively full employment, and a satisfactory rate of economic growth.
Recessions
Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
Equation of Exchange
An economic equation (MV = PQ) that relates the money supply (M) and its velocity (V) to the price level (P) and quantity of goods sold (Q).
MV = PQ
An equation of exchange in economics that states money supply times the velocity of money equals the price level times the output (quantity of goods and services produced).
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