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Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026 Exercise 6
Suppose that the economy is going into a recession.
a) Is a spending increase or a tax cut more likely to be an effective response to the recession? Explain.
b) What effect will the tax cut have on the budget deficit?
c) List two possible negative consequences from using fiscal policy to fight a recession.
a) Is a spending increase or a tax cut more likely to be an effective response to the recession? Explain.
b) What effect will the tax cut have on the budget deficit?
c) List two possible negative consequences from using fiscal policy to fight a recession.
Explanation
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When the economy goes into recession, pe...
Economics: The Basics 1st Edition by Mike Mandel
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