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Question 7 (1 point) S3 S1 S2 3 0 5 1 D1 D2 Loanable funds real interest rate 12
Refer to the figure above. In the 2000 elections George Bush made a proposal to give away the budget surpluses in lower taxes
Question 3(1 point) In an open economy suppose that GDP is $12 trillion. Consumption is $8 trillion and government spending i
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Answer #1

7. Option 2

Explanation: When taxes are lowered, people consume more and the aggregate demand shifts right. So, the economy will reach to point 4.

5. Option 2

Explanation: Government saving = tax revenue - government spending = 0.5 trillion - 2 trillion = -$1.5 trillion.

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