According to a Classical, sound finance perspective on macroeconomics, if an economy is on an inflationary path, the government should run:
A. a budget deficit and increase spending, which will reduce output.
B. neither a surplus nor a deficit since changes in deficit spending do not affect output.
C. a budget surplus and decrease spending, which will reduce output.
D. neither a surplus nor a deficit since changes in spending affect output.
Answer: B
Economics
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