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If Government Increases Its Tax Revenues by $15 Billion and the MPC

Question 10

Multiple Choice

If government increases its tax revenues by $15 billion and the MPC is 2/3,then we can expect the equilibrium GDP to:

A) decrease by $30 billion.
B) decrease by $45 billion.
C) decrease by $35 billion.
D) decrease by $55 billion.

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