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Suppose real GDP is $13 trillion, potential real GDP is $13.5 trillion, and Congress and the president plan to use fiscal policy to restore the economy to potential real GDP. Assuming a constant price level, Congress and the president would need to decrease taxes by $500 billion. less than $500 billion. more than $500 billion. None of these are correct. Congress should raise taxes in this case.
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Suppose real GDP is $13 trillion, potential real GDP is $13.5 trillion, and Congress and the preside...
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