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Let Taxes Be Set Equal to T = T0

Question 35

Multiple Choice

Let taxes be set equal to T = T0 + tY, consumption given by


A) It would increase by $10 billion.
B) It would increase by more than $10 billion.
C) It would increase less than $10 billion.
D) It would be unaffected, since the federal deficit would be unchanged.
E) It would increase by more or less than $10 billion depending on the values assumed by a, b, and t.

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