Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________.
A) decrease; decrease B) increase; increase C) increase; decrease D) decrease; increase
Question 2
Ceteris paribus, an increase in the government budget deficit increases interest rates in the United States and causes a real appreciation of the dollar.
Indicate whether the statement is true or false
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