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Explain Why Each of the Following Statements Is a Rationale

Question 2

Essay

Explain why each of the following statements is a rationale for conducting active or passive policy:
a. Economic circumstances can change dramatically between the time that an economic downturn begins and the time when policy actions have an effect on the economy.
b. Economists are not very accurate forecasters.
c. Increases in government spending generate increases in economic output. d. Fluctuations in economic output have been less severe since World War II.

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