According to a Classical, sound finance perspective on macroeconomics, if an economy is on an inflationary path, the government should run:
A) a budget deficit and increase spending, which will reduce output.
B) a budget surplus and decrease spending, which will reduce output.
C) neither a surplus nor a deficit since changes in deficit spending do not affect output.
D) neither a surplus nor a deficit since changes in spending affect output.
Correct Answer:
Verified
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A)an automatic stabilizer because
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