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In the IS-LM Model,when Government Spending and Taxes Increase by the Same

Question 39

Multiple Choice

In the IS-LM model,when government spending and taxes increase by the same amount


A) income and interest rates remain unchanged.
B) interest rates and income rise.
C) interest rates and income fall.
D) changes in interest rates are indeterminate but income rises.
E) none of the above.

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