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If the Government Wants to Increase Equilibrium Income by $150

Question 13

Multiple Choice

If the government wants to increase equilibrium income by $150 billion but does not want to change the size of the deficit, it should


A) increase G and decrease T by $150 billion
B) increase G and T by $150 billion
C) decrease G and T by $150 billion
D) decrease C and increase T by $150 billion
E) We cannot answer the question without knowing the MPC.

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