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Some questions may contain one or more answers. Please explain why. 1) During the Great Recession,...

Some questions may contain one or more answers. Please explain why.

1) During the Great Recession, the goal of fiscal policy was to

  • Increase aggregate demand
  • Decrease aggregate supply
  • None of these
  • Decrease aggregate demand (incorrect)
  • Increase aggregate supply

2) According to the Keynesian framework, which of the following may help a country reduce inflation, but will not help that country to get out of a recession?

  • Increased spending by the government on health care
  • An increase in military spending
  • Decrease in a major trading partners export prices
  • A decrease in the tax rate on consumer income
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