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In a Closed Economy,if the Government Is Already Running a Budget

Question 60

Multiple Choice

In a closed economy,if the government is already running a budget deficit and then decides to increase spending by $50 billion without raising taxes,one can expect


A) investment spending to fall by $50 billion.
B) consumption to fall by $50 billion.
C) saving to rise by $50 billion.
D) consumption and investment to collectively fall by $50 billion.
E) gross domestic product (GDP) to increase by $50 billion.

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