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Government Purchases and the Multiplier Effect
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Problem 10
Government Purchases and the Multiplier Effect
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20. Fiscal Policy / Government Purchases and the Multiplier Effect / Problem 10
Problem 10
What is the first step in the chain reaction caused by an increase in government spending?
A
Decrease in aggregate demand.
B
Increase in taxes.
C
Increase in household income.
D
Decrease in GDP.
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