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Assume that both government purchases (G) and taxes (T) have increased by the same amount. In re- sponse, we would expect the real interest rate
Assume that both government purchases (G) and taxes (T) have increased by the same amount. In re- sponse, we would expect the real interest rate (r) to , the level of investment (I) to , and the level of national saving (S) to . A.) rise; rise; rise.
B.) rise; fall; fall.
C.) stay the same; stay the same; stay the same.
D.) fall; rise; rise.
E.) None of the above, or we aren't given enough information to answer the question
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