If the government increases taxes, what happens to the price index and the actual real GDP holding all else constant? Group of answer choices In this case, the price index decreases and the actual real GDP decreases. In this case, the price index increases and the actual real GDP decreases. In this case, the price index increases and the actual real GDP increases. In this case, the price index decreases and the actual real GDP increases.
If the government increases taxes, what happens to the price index and the actual real GDP holding all else constant? Group of answer choices In this case, the price index decreases and the actual real GDP decreases. In this case, the price index increases and the actual real GDP decreases. In this case, the price index increases and the actual real GDP increases. In this case, the price index decreases and the actual real GDP increases.
Macroeconomics: Principles and Policy (MindTap Course List)
13th Edition
ISBN:9781305280601
Author:William J. Baumol, Alan S. Blinder
Publisher:William J. Baumol, Alan S. Blinder
Chapter6: How Statisticians Measure Inflation
Section6.A: How Statisticians Measure Inflation
Problem 6TY
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Question
If the government increases taxes, what happens to the price index and the actual real GDP holding all else constant?
Group of answer choices
In this case, the price index decreases and the actual real GDP decreases.
In this case, the price index increases and the actual real GDP decreases.
In this case, the price index increases and the actual real GDP increases.
In this case, the price index decreases and the actual real GDP increases.
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