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Suppose that there were a sharp increase in Investment spending, perhaps the result of adoption of rapidly changing technology. If the government feared inflation or
Suppose that there were a sharp increase in Investment spending, perhaps the result of adoption of rapidly changing technology. If the government feared inflation or wanted to account for the potential replacement of labor with capital, there's a good chance they would respond by
increasing taxes
increasing the money supply
increasing government expenditures
All of the above are correct.
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