Suppose the government of a country wants to increase the aggregate demand of its economy by $10 billion at all price levels. However, it currently has a balanced budget with no surplus and is unwilling to borrow money to finance fiscal policy. The government could still accomplish its goal by increasing government purchases by ________ and increasing taxes by $10 billion.
A. $20 billion.
B. $10 billion
C. $15 billion.
D. $5 billion
Answer: B
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The aggregate demand curve shows that, if other factors are held constant
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Indicate whether the statement is true or false
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Indicate whether the statement is true or false