The economy is in a recession and the recessionary gap is large. What is a discretionary fiscal stimulation package that would avoid a larger budget deficit?

Question

Accepted Answer

an increase in government expenditure and an equal increase in taxes

Answer

a decrease in transfer payments and an equal increase in consumption expenditure

Answer

an increase in transfer payments and an equal decrease in consumption expenditure

Answer

a decrease in government expenditure and an equal decrease in taxes

Answer

an increase in transfer payments and an equal decrease in taxes

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The economy is in a recession and the recessionary gap is large. What is a discr...

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