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Which of the following is the best choice if the desired fiscal stimulus is $10 billion and the desired AD increase is $100 billion?

A) Tax hike is $11.11 billion.

C) Tax cut is $11.11 billion.
B) Tax hike is $10 billion.

D) Tax cut is $10 billion.

ANSWER:

C) Tax cut is $11.11 billion.

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