If a recession persists due to nominal wage and price stickiness (i.e., slow adjustment of nominal wages downward), what kind of fiscal policy can bring us out of this recession? decreased government expenditures and increased taxes increased government expenditures and decreased taxes decreased government expenditures contractionary fiscal policy
If a recession persists due to nominal wage and price stickiness (i.e., slow adjustment of nominal wages downward), what kind of fiscal policy can bring us out of this recession? decreased government expenditures and increased taxes increased government expenditures and decreased taxes decreased government expenditures contractionary fiscal policy
Chapter15: Fiscal Policy
Section: Chapter Questions
Problem 1SQ
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Question
If a recession persists due to nominal wage and price stickiness (i.e., slow adjustment of nominal wages downward), what kind of fiscal policy can bring us out of this recession?
|
decreased government expenditures and increased taxes |
|
increased government expenditures and decreased taxes |
|
decreased government expenditures |
|
contractionary fiscal policy |
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