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Depreciation: This signifies the loss of value from an existing stock of real capital (for an individual company or for whole economy), reflecting normal wear-and-tear of machinery, equipment, and infrastructure. A country or company should invest continuously just to offset depreciation, or else its capital stock shall gradually run down.
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The economy, however, is facing inflationary pressures. To deal with the macroeconomic problem, the government uses expansionary fiscal policy to decrease taxes and, as an indirect
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