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Government Purchases and the Multiplier Effect
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Problem 10
Government Purchases and the Multiplier Effect
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20. Fiscal Policy / Government Purchases and the Multiplier Effect / Problem 5
Problem 5
In what way can fiscal policy be used to counteract a recession?
A
By increasing taxes to increase government revenue.
B
By maintaining current spending levels to stabilize the economy.
C
By increasing government spending to trigger a multiplier effect, boosting GDP.
D
By decreasing government spending to reduce inflation.
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