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Because of Bounce-back effects (also known as feedback effects), in order for the following equation to hold, what needs to happen? AY = 1/(1-mpc) x

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Because of Bounce-back effects (also known as feedback effects), in order for the following equation to hold, what needs to happen? AY = 1/(1-mpc) x AG 0 The Fed needs to increase the money supply to counteract the increase in interest rates 0 The government needs to increase government expenditures by a signicant amount of money 0 The government needs to decrease the interest rate Q The government needs to issue bonds to pay for the change in expenditures

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