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The Short-Run Effect of an Increase in Government Purchases Is

Question 3

Multiple Choice

The short-run effect of an increase in government purchases is


A) a rightward shift of the aggregate demand curve and an upward shift of the inflation adjustment line.
B) a leftward shift of the aggregate demand curve and an upward shift of the inflation adjustment line.
C) a rightward shift of the aggregate demand curve and a downward shift of the inflation adjustment line.
D) a rightward shift of the aggregate demand curve and movement along the inflation adjustment line.
E) a leftward shift of the aggregate demand curve and movement along the inflation adjustment line.

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