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Assume That the Economy Is Initially at Its Equilibrium Level

Question 111

Multiple Choice

Assume that the economy is initially at its equilibrium level of GDP.What will happen to the equilibrium level of GDP if planned investment decreases by 20,government spending increases by 30,and taxes increase by 10?


A) GDP will decrease by 60
B) GDP will decrease by 10
C) there will be no change in GDP
D) GDP will increase by 10

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