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According to Classical Economic Theory

Question 51

Multiple Choice

According to classical economic theory


A) expansionary fiscal policies are required to bring the economy out of recession.
B) deficit financing is the only effective remedy for recession.
C) fiscal policies are more effective than monetary policies as economic stabilization tools.
D) if the economy is experiencing excessive inflation,the government should raise taxes and/or cut expenditures.
E) falling wages and prices would be the natural cure to recession.

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