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Below Is Some Information About the State of the Budget

question 50

Multiple Choice

Below is some information about the state of the budget and the economy.
1.A budget deficit and a recessionary gap.
2.A budget deficit and an inflationary gap.
3.A budget surplus and a recessionary gap.
4.A budget surplus and an inflationary gap.
-Refer to the information above to answer this question.When would a counter-cyclical fiscal policy call for a decrease in government spending or a tax increase?


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