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After Two Decades of Increasing Government Spending Financed by Borrowing,Canada

Question 58

Multiple Choice

After two decades of increasing government spending financed by borrowing,Canada reversed the direction of fiscal policy in the latter half of the 1990s.This reversal was followed by


A) an increase in the unemployment rate to historically high levels.
B) sluggish growth of real GDP compared to the earlier era.
C) solid growth of real GDP and a declining rate of unemployment.
D) a massive political defeat of the Liberal Party in the next election and reversal of the policy.

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