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Long Run Effects of Fiscal Policy
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Long Run Effects of Fiscal Policy
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20. Fiscal Policy / Long Run Effects of Fiscal Policy / Problem 2
Problem 2
What challenges do governments face in balancing spending during economic recessions and expansions?
A
Governments easily balance spending by reducing it during recessions and increasing it during expansions.
B
Governments face no challenges in balancing spending during economic cycles.
C
Governments increase spending during expansions and reduce it during recessions, leading to balanced budgets.
D
Governments struggle to reduce spending during expansions after increasing it during recessions, leading to persistent deficits.
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