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If Government Expenditure Increases by $200 Billion and Taxes Simultaneously

Question 180

Multiple Choice

If government expenditure increases by $200 billion and taxes simultaneously increase by $200 billion,then aggregate demand


A) remains the same.
B) decreases no matter what happens to aggregate supply.
C) increases no matter what happens to aggregate supply.
D) increases only if aggregate supply increases.
E) increases only if aggregate supply decreases.

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