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Small Mahtab Leghari

Budget: $15

Solved!

The economy is in a recession and experts predict it will take 2.5 years for the economy to self correct. The government is under pressure from the citizens to take action and a year and a half into the recession they implement an expansionary policy that will take 1.5 years to impact the economy. What is likely to occur once the policy has made its way into the economy?

Answer

Small Tutor Aaron Lee

A recession means GDP is less than potential GDP. After 2.5 years the economy ret...