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Fiscal Policy Cannot Be Used to Deal with Inflation on a Long-Term

Question 51

Multiple Choice

Fiscal policy cannot be used to deal with inflation on a long-term basis because:


A) government cannot lower the growth rate in the money supply indefinitely.
B) there is a limit as to how much government can cut taxes.
C) government may have difficulties on reaching a compromise as to the appropriate policy, a change in taxes or a change in government spending.
D) there is a limit as to how much government can decrease spending.

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