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Suppose the Economy Experiences an Inflationary Gap

Question 138

Multiple Choice

Suppose the economy experiences an inflationary gap.Policymakers who believe that the Private sector has failed to provide adequately, a host of services that would benefit society would favor which of the following policies to close the gap?


A) reduction in government spending
B) increases in income tax rates
C) increases in corporate tax rates
D) increases in interest rates

Correct Answer:

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