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An Increase in Taxes in an Economy, Other Things Constant

Question 46

Multiple Choice

An increase in taxes in an economy, other things constant, will:


A) decrease unemployment in the economy in the long run
B) decrease the price level in the economy in the long run
C) increase real output in the economy in the long run.
D) create an inflationary gap in the economy
E) create a recessionary gap in the economy.

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