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[3 marks] The government increases taxes. Consider the following two statements, holding everything else in the economy the same: l. Private savings increase AND public

[3 marks] The government increases taxes. Consider the following two statements, holding everything else in the economy the same: l. Private savings increase AND public savings decrease ll. Domestic savings are unchanged A. Statement l. is TRUE and Statement ll. is TRUE. B. Statement l. is TRUE and Statement ll. is FALSE. C. Statement l. is FALSE and Statement ll. is TRUE. D. Statement l. is FALSE and Statement ll. is FALSE

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