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The federal budget for national defense increased substantia

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Reference no: EM13321403

1. The federal budget for national defense increased substantially to pay for the Iraq and Afghanistan wars. How would GDP in the United States have been affected if this higher defense spending led to

a. larger budget deficits?

b. less spending elsewhere in the budget, so that total government purchases remained the same?

2. Explain why G has the same multiplier as I, but taxes have a different multiplier.

Reference no: EM13321403

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