32. The economy is growing slowly, the inflationary gap is large, and there is a budget deficit....

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32. The economy is growing slowly, the inflationary gap is large, and there is a budget deficit.

a. Do we know whether the budget deficit is structural or cyclical? Explain your answer.

b. Do we know whether automatic stabilizers are increasing or decreasing aggregate demand? Explain your answer.

c. If a discretionary decrease in government expenditure occurs, what happens to the structural budget balance? Explain your answer.

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Parkin Macroeconomics

ISBN: B0070OLVAC

10th Edition

Authors: Michael Parkin

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Question Posted: Nov 06, 2024 07:00 AM

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32. The economy is growing slowly, the inflationary gap is large, and there is a budget deficit....

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Parkin Macroeconomics

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