If Policy Makers Desire a $30 Increase in Output and the Consumption

question 10

Multiple Choice

If policy makers desire a $30 increase in output and the consumption function is C = 100 + .75(Y-T) ,then they must

• A)increase government spending by $8.
• B)increase taxes by $10.
• C)cut government spending and taxes by $10.
• D)decrease taxes by $10.

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Definitions:

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The act of giving one thing and receiving another, especially of a similar value, in return.

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