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In the Standard View, Fiscal Surpluses

Question 38

Multiple Choice

In the standard view, fiscal surpluses


A) contract the economy in the long run unless the central bank takes action to lower interest rates.
B) contract the economy in the long run unless the central bank does not take action to lower interest rates.
C) contract the economy in the short run unless the central bank takes actions to lower interest rates.
D) contract the economy in the short run unless the central bank takes action to raise interest rates.

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