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The Economy Is in a Recessionary Gap and There Is

Question 34

Multiple Choice

The economy is in a recessionary gap and there is complete crowding out.Furthermore,there is no evidence that the economy is in a liquidity trap or that investment is interest-insensitive.This makes the case for the use of __________ policy stronger than it might be otherwise.


A) contractionary monetary
B) contractionary fiscal
C) expansionary fiscal
D) expansionary monetary

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