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In Addition to Annually and Cyclically Balanced Budget Policies,a Third

Question 56

Multiple Choice

In addition to annually and cyclically balanced budget policies,a third approach argues that the government's budget should be


A) set to promote the preferred combination of unemployment and inflation.
B) balanced over the course of the business cycle.
C) measured in current rather than constant dollars to accurately reflect the magnitude of fiscal stimulus.
D) designed to ensure persistent surpluses to reduce unemployment.
E) using the tax laws to stimulate investment.

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