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8 October, 10:00

When the federal government cuts taxes and increases purchases to stimulate the economy during a period of recession, such actions are designed to be?

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  1. 8 October, 10:29
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    They are reflationary fiscal policies.

    Policies that involve taxation and government spending are called fiscal policies, and when government spending increases or taxation decreases, this increases aggregate demand due to the increase in consumption by the public, which leads to these being called reflationary.
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