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How do government purchases and government spending differ in terms of their effect on GDP? Why is it important to try to determine the size
- How do government purchases and government spending differ in terms of their effect on GDP?
- Why is it important to try to determine the size of the fiscal policy multiplier?
- Suppose an economy has an inflationary gap. How does the government's actual budget deficit or surplus compare to the deficit or surplus it would have at potential output?
- Suppose the president was given the authority to increase or decrease federal spending by as much as $100 billion in order to stabilize economic activity. Do you think this would tend to make the economy more or less stable?
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