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Suppose the multiplier is 3, the money multiplier is 6, and the income multiplier with respect to the money supply is 4. The government increases
Suppose "the" multiplier is 3, the money multiplier is 6, and the income multiplier with respect to the money supply is 4. The government increases spending by $12 billion, but because the economy is operating at full capacity, it wants to use monetary policy to offset the impact that this increase of government spending will have on income. The central bank should:
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