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If Government Spending Drops and Taxes Rise

Question 159

Multiple Choice

If government spending drops and taxes rise:


A) both will lower equilibrium income,but the effects of government spending will be larger.
B) both will lower equilibrium income,but the effects of taxes will be larger.
C) both will raise equilibrium income,but the effects of government spending will be larger.
D) both will raise equilibrium income,but the effects of taxes will be larger.

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