Answered

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Active stabilization policies can be pursued by either increasing the size of government or decreasing it. If the government wishes to bring the economy back to full employment by increasing the size of government, then policy makers should:
a) in a recession decrease taxes and in inflation decrease government expenditures.
b) in a recession increase taxes and in inflation increase government expenditures.
c) in a recession decrease government expenditures and in inflation decrease taxes.
d) in a recession increase government expenditures and in inflation increase taxes.

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