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In the Standard View, Fiscal Deficits

Question 37

Multiple Choice

In the standard view, fiscal deficits


A) stimulate the economy in the long run as long as the central bank takes action to raise interest rates.
B) stimulate the economy in the long run as long as the central bank does not take action to raise interest rates.
C) stimulate the economy in the short run as long as the central bank takes actions to raise interest rates.
D) stimulate the economy in the short run as long as the central bank does not take action to neutralize the fiscal stimulus.

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