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1. Fiscal policy refers to
2. A federal deficit occurs when
3. The appropriate fiscal policy to remedy a recession
4. The appropriate fiscal policy to remedy inflation calls for
5. To close a recessionary gap
6. To close an expansionary gap
7. One drawback of using fiscal policy to close a recessionary gap is that
8. Use the following three responses to answer the question: Fiscal policy is not always effective because of
I. crowding out.
II. rational expectations.
III. the balanced budget amendment.
9. Stagflation occurs when
10. Study the diagram below.
11. Crowding out
12. The theory of rational expectations
13. Study the diagram below.
14. Automatic, or built-in, stabilizers
15. The Phillips curve