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If a Government Wants to Pursue an Expansionary ﬁScal Policy

Question 111

Multiple Choice

If a government wants to pursue an expansionary ﬁscal policy, then a tax cut of a certain size will be more expansionary when the

A) economy's MPS is small.
B) economy's MPS is large.
C) economy's MPC is small.
D) unemployment rate is low.

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