Stimulate the economy in case of recessionary gap

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Fiscal policy refers to the use of government expenditures or tax policy to influence the aggregate demand for a specific purpose. In the case of the recessionary gap, explain how government expenditures could be used in this instance to stimulate the economy. What is the government expenditures multiplier (the specific formula) that is relevant in this case?

Reference no: EM1315244

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