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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Explain how, under certain conditions, expansionary fiscal policy can destabilize the economy.

To determine

Identify the conditions that expansionary fiscal policy destabilizes the economy.

Explanation

Generally, the government follows an expansionary fiscal policy to stabilize the economy when it faces a recessionary gap.  Although to implement the fiscal policy properly, the government needs the data about the natural real gross d...

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