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Noah needs to advise the President on how to cool down the economy as it is experiencing inflation. Given an MPC of .9, which of
Noah needs to advise the President on how to "cool down" the economy as it is experiencing inflation. Given an MPC of .9, which of the following fiscal policy changes would be the most contractionary?
A $10 billion increase in taxes and a $30 billion cut in government spending
A $30 billion increase in taxes and a $10 billion cut in government spending
A $40 billion increase in taxes and $40 billion increase in government spending
A $20 billion increase in taxes and a $20 billion increase in government spending
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