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An economy is experiencing a recessionary gap. The government can​ ______.

1 Answer

4 votes

Answer:

Increase expenditure or cut taxes to increase aggregate demand.

Step-by-step explanation:

A recessionary gap is a macroeconomic term which portrays an economy working at a level underneath its full-employment equilibrium. Under a recessionary gap condition, the degree of real gross domestic product (GDP) is lower than the degree of full employment, which puts descending pressure on prices over the long haul.

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User Condad
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