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    Exam 11: Fiscal Policy
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    Assume the MPC Is 0
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Assume the MPC Is 0

Question 87

Question 87

Multiple Choice

Assume the MPC is 0.75.To eliminate an AD shortfall of $200 billion,the government should


A) Decrease spending by $50 billion.
B) Increase spending by $50 billion.
C) Increase taxes by $66.7 billion.
D) Increase spending by $800 billion.

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