If the Government Wants to Increase Equilibrium Income by $150

question 13

Multiple Choice

If the government wants to increase equilibrium income by $150 billion but does not want to change the size of the deficit, it should

• A)increase G and decrease T by $150 billion
• B)increase G and T by $150 billion
• C)decrease G and T by $150 billion
• D)decrease C and increase T by $150 billion
• E)We cannot answer the question without knowing the MPC.

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