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Question 9 (6 marks) (a) Consider an economy that has a recessionary gap. Very briefly comment on how a classical economist and how a Keynesian

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Question 9 (6 marks) (a) Consider an economy that has a recessionary gap. Very briefly comment on how a classical economist and how a Keynesian economist believe the gap can be removed. Which one do you think is right? (4 marks) (b) Very briefly explain how automatic stabilisers in a contraction can move a budget balance into deficit. (2 marks)

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