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Krugman and Recessionary Policy

APMACR-LPOYE4

Nobel prize-winning Princeton University economist Paul Krugman suggests that during a recession:

I. Expansionary policy is not useful

II. Interest rates will not necessarily rise due to increased federal borrowing

III. The economy will be self-healing so long as the trade balance is positive

A

I Only

B

II Only

C

I and II

D

I and III

E

II and III