In Country Z, the government simultaneously decreases its expenditures by $25 billion and decreases taxes by $25 billion. If the MPS is equal to 0.2, the government's action ________ real GDP by ________.
A) decreases; $50 billion
B) decreases; $25 billion
C) increases; $50 billion
D) has no effect on; $0
Correct Answer:
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