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Evaluate the policies can the government of a free market economy implement to stimulate economic growth.

Evaluate the policies can the government of a free market economy implement to stimulate economic growth.

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The government can implement expansionary fiscal policy by reducing taxes and inducing higher spending, makingvstructural reforms and automatic stabilizers running at background to stimulate economic growth. This infuses higher liquidity into system which boosts disposable incomes and thus consumption widens leading to higher aggregate demand. Subsequently real GDP rises and so does prices.

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