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When a Government Has Decided on a Permanent Spending Increase,a

Question 46

Multiple Choice

When a government has decided on a permanent spending increase,a valid reason to increase borrowing rather than taxes might be to ________.


A) to avoid an unnecessary stimulus to aggregate demand
B) to shift the burden from domestic taxpayers to foreign bond holders
C) to avoid distortions that might reduce long-run aggregate supply
D) to avoid an increase in income inequality

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