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When the Government Raised Taxes at the Beginning of the Great

Question 82

Multiple Choice

When the government raised taxes at the beginning of the Great Depression,it caused aggregate demand to decrease because


A) it caused the stock market to crash,which reduced household wealth.
B) household disposable income decreased,causing consumer spending to decrease.
C) it caused high levels of inflation,which reduced the real value of household income.
D) the money supply increased rapidly,causing interest rates to decrease.
E) barriers to international trade decreased at the same time.

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