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Combining Monetary and Fiscal Policies to Achieve Full Employment Can

Question 61

Multiple Choice

Combining monetary and fiscal policies to achieve full employment can lead to a one-shot improvement in economic growth by


A) decreasing the gap between actual and potential output.
B) shifting the production possibilities curve outward.
C) pushing to a new equilibrium where desired GDP exceeds actual GDP.
D) reducing government expenditures.
E) increasing nominal GDP faster than real GDP.

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