(Answered) Question- suppose the economy is in a recession and the

Management Studies

Question- Suppose the economy is in a recession, and the recessionary gap is large.

a. Describe the discretionary and automatic fiscal policy actions that might occur.

b. Describe a discretionary fiscal stimulation package that could be used that would not bring an increase in the budget deficit.

c. Explain the risks of discretionary fiscal policy in this situation.

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