R

Ram Sharma • 193.84K Points
Coach Economic 

Q. What is the effect of an increase in taxes under fixed exchange rates and perfect asset substitutability in the short run?

  • (A) An increase in output and no change in interest rates.
  • (B) A decline in output and interest rates.
  • (C) A decline in output and no change in interest rates.
  • (D) An increase in output and interest rates.
Correct Answer - Option(A)

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