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If taxes increase, describe how monetary policymakers would respond (if at all) to stabilize economic activity. Assume the economy starts at a long-run equilibrium. An increase in taxes ▼ reduces does not change increases aggregate demand, so monetary policymakers would pursue an autonomous ▼ easing tightening of monetary policy to stabilize economic activity
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If taxes increase, describe how monetary policymakers would respond (if at all) to stabilize economi...
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