Equal increases in government spending and taxes

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Reference no: EM13995913

According to the Keynesian model, equal increases in government spending and taxes will result in which of the following?

A. Increases in the price level accompanied by increases in output

B. Increased imports due to the effects of interest rate changes on exchange rates

C. Decreased imports due to the effects of tax changes on exchange rates

D. No change in the price level and a decrease in output E. An increase in output and no change in the price level

Reference no: EM13995913

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