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Suppose There Is a Tax Cut and the Central Bank

Question 51

Multiple Choice

Suppose there is a tax cut and the central bank controls the money supply. Which of the following is a complete list of the variables that must increase as a result of the tax cut?


A) Consumption and output.
B) Consumption.
C) Consumption, output and investment.
D) Consumption and investment.
E) Consumption, output and the interest rate.

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