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The government often wants to stabilize or stimulate the economy.

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Question

The government often wants to stabilize or stimulate the economy. In order to do so, they must decide on the relative size of the money supply, taxes, government spending, or some combination of these alternatives. What are the difficulties encountered in deciding which policy to enact and the size or magnitude of these actions? Use examples when answering these questions.

 

Paper#22680 | Written in 18-Jul-2015

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