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Assume the economy is operating below full employment. Which of the following policy actions will allow aggregate spending to increase but will not

Assume the economy is operating below full employment. Which of the following policy actions will allow aggregate spending to increase but will not increase the size of the government in the process?
A. Increase government spending and leave tax rates unchanged
B. Decrease tax rates and leave government spending unchanged
C. Increase government spending and taxes by the same amount
D. Decrease government spending by more than an increase in taxes.

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Economics-8223985.doc

Assume the economy is operating below full employment. Which of the following policy
actions will allow aggregate spending to increase but will not increase the size of the
government in the...

Sign up to view the full answer

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