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If Policy Makers Want to Increase Real GDP by $100

Question 119

Multiple Choice

If policy makers want to increase real GDP by $100 billion and the marginal propensity to consume is 0.75, they should _____ taxes by _____ .

A) decrease; more than $25 billion
B) decrease; less than $25 billion
C) increase; more than $25 billion
D) increase; less than $25 billion

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