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-Refer to the Above Figure

Question 149

Multiple Choice

  -Refer to the above figure. Suppose that the economy starts at AD₁. If the government reduces taxes, then the economy goes to AD₂, but then falls back to AD₁. This is an example of A) partial crowding-out effect. B) the free rider problem. C) laissez-faire. D) complete crowding-out effect.
-Refer to the above figure. Suppose that the economy starts at AD₁. If the government reduces taxes, then the economy goes to AD₂, but then falls back to AD₁. This is an example of


A) partial crowding-out effect.
B) the free rider problem.
C) laissez-faire.
D) complete crowding-out effect.

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