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Consider a Model with Demand-Determined Output and a Constant Price

Question 71

Multiple Choice

Consider a model with demand-determined output and a constant price level.A decrease in the net tax rate causes ________ in autonomous spending and a ________ in the simple multiplier.


A) a rise; rise
B) a rise; fall
C) no change; rise
D) no change; fall
E) a fall; fall

Correct Answer:

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