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In an Economy, the Government Wants to Decrease Aggregate Demand

Question 220

Multiple Choice

In an economy, the government wants to decrease aggregate demand by $24 billion at each price level to decrease real GDP and control demand-pull inflation.If the MPC is .75, then it could increase taxes by:


A) $6 billion.
B) $8 billion.
C) $10 billion.
D) $12 billion.

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