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If an Economy Were Experiencing a High Rate of Unemployment

Question 91

Multiple Choice

If an economy were experiencing a high rate of unemployment as the result of weak aggregate demand, a Keynesian economist would be most likely to recommend


A) a reduction in taxes coupled with a reduction in government expenditures of equal size.
B) an increase in government expenditures coupled with an increase in taxes of equal size.
C) a reduction in taxes, without any offsetting reduction in government expenditures.
D) maintenance of a balanced budget.

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