Suppose the government purposely changes the economy's cyclically adjusted budget from a deficit of 0 percent of real GDP to a deficit of 3 percent of real GDP.The government is engaging in a(n)

Question

Quizplus · Accepted Answer

The government is increasing the deficit, which typically involves increasing spending or cutting taxes to stimulate economic growth, characteristic of an expansionary fiscal policy.

Suppose the Government Purposely Changes the Economy's Cyclically Adjusted Budget