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Part 1 - Check Your Understanding- For each of the policy combinations below, identify if the aggregate demand, real output, and price level will increase,

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Part 1 - Check Your Understanding- For each of the policy combinations below, identify if the aggregate demand, real output, and price level will increase, decrease, or be indeterminate. Price Policy Combination Aggregate Real Demand Output Level 1. Decrease in personal income taxes and decrease in the discount rate 2. Decrease in government spending and purchase of bonds by the central government 3. Decrease in the reserve requirement and increase in taxes Central bank sells treasuries and decrease in 4. government spending

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