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A Decrease in Government Purchases or an Increase in Taxes

Question 57

Multiple Choice

A decrease in government purchases or an increase in taxes, other things being equal, will tend to:


A) increase interest rates and increase net exports as a result.
B) increase interest rates and decrease net exports as a result.
C) decrease interest rates and increase net exports as a result.
D) decrease interest rates and decrease net exports as a result.

Correct Answer:

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