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Respond to the following statements about an economy where the government budget deficit has increased during a recession. (a) The increase in the budget deficit
Respond to the following statements about an economy where the government budget deficit has increased during a recession.
(a) The increase in the budget deficit indicates that policymakers have implemented expansionary fiscal policies to bring the economy out of recession.
(b) The increase in the budget deficit indicates that fiscal policymakers have been irresponsible. They should enact restrictive policies, such as tax hikes or spending cuts, to reduce the deficit.
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