Refer to Figure 15.2. The economy is at full employment and the unemployment rate is at the natural rate at point

The ________ view says that fiscal stimulus has a multiplier effect that makes it a ________ tool to fight a deep recession

A) Keynesian; weak B) "free lunch"; powerful C) Keynesian; powerful D) mainstream; powerful E) None of the above answers is correct.

During a recession, automatic stabilization causes the government budget deficit to

A) fall. B) increase. C) remain stable. D) move in the same direction as Y.