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    Exam 19: Debates in Macroeconomics Over the Role and Effects of Government
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    A $10 Billion Reduction in Taxes Increases Real GDP by $90
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A $10 Billion Reduction in Taxes Increases Real GDP by $90

Question 62

Question 62

Multiple Choice

A $10 billion reduction in taxes increases Real GDP by $90 billion. Assuming a constant price level,what does the tax multiplier equal?


A) 100
B) 9
C) 80
D) 190
E) 0.11

Correct Answer:

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