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    Exam 25: Spending and Output in the Short Run
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    In the Basic Keynesian Model, a Tax Increase
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In the Basic Keynesian Model, a Tax Increase

Question 70

Question 70

Multiple Choice

In the basic Keynesian model, a tax increase:


A) reduces short-run equilibrium output.
B) increases short-run equilibrium output.
C) reduces potential output.
D) increases potential output.

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