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Sagot :
Final answer:
Keynesian economic theory recommends using fiscal policies to address economic challenges such as recessions and inflation.
Explanation:
Keynesian economic theory suggests using expansionary fiscal policy during a recession, such as increasing government spending or implementing tax cuts to stimulate the economy by shifting the aggregate demand curve to the right. On the other hand, contractionary fiscal policy, like tax increases or government spending cuts, is recommended when the economy is operating above potential GDP to combat inflation.
Learn more about Keynesian economic theory here:
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