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One Advantage of Using Expansionary Fiscal Policy Rather Than Relying

Question 8

Multiple Choice

One advantage of using expansionary fiscal policy rather than relying on automatic adjustment to recover from a recessionary gap is that


A) the economy will overshoot potential GDP and a boom will be underway.
B) inflation will not be as stimulated.
C) price level will rise higher than otherwise.
D) the recovery may be more rapid.
E) the recovery will be slower,thereby causing less disruption.

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