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Suppose the full-employment, noninflationary level of real output is GDP3 (not GDP2) in the economy depicted in the figure. If the economy is operating at

Suppose the full-employment, noninflationary level of real output is GDP3 (not GDP2) in the economy depicted in the figure. If the economy is operating at GDP2 instead of GDP3, its current fiscal policy is multiple choice 3 contractionary, since a surplus would exist. balanced, since there is no deficit. expansionary, since a surplus would exist. contractionary, since a deficit would exist

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