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According to Our Model, Increasing G During a Recession

Question 42

Multiple Choice

According to our model, increasing G during a recession,


A) makes the economy worse off, since the equilibrium allocation of resources is Pareto-optimal.
B) will help the economy recover and increase economic welfare.
C) will increase consumption spending by consumers according to the multiplier effect.
D) has no effect.
E) had a multiplier much greater than one.

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