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A cyclical deficit is appropriate during economic downturns when a government intentionally increases spending or reduces taxes to stimulate growth and support the economy. This approach helps counteract rising unemployment and declining consumer demand. However, it should be temporary, as the goal is to return to a balanced budget during periods of economic expansion when revenues increase. Overall, cyclical deficits can stabilize the economy but must be managed carefully to avoid long-term debt accumulation.

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1mo ago

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