Suppose the actual budget deficit increases when the economy falls into a recession. This is an indication that
A) monetary policy was used during the recession.
B) monetary policy was not used during the recession.
C) fiscal policy was used during the recession.
D) fiscal policy was not used during the recession.
Question 2
The model of expectations in which the current level of inflation depends on past levels is referred to as:
A) realized real expectations. B) adaptive expectations.
C) rational expectations. D) composite expectations.
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