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The Long-Run Effects of an Increase in Government Purchases Are

Question 1

Multiple Choice

The long-run effects of an increase in government purchases are that interest rates will ____, inflation will ____, and real GDP will ____.


A) decrease; decrease; remain unchanged
B) increase; increase; remain unchanged
C) remain unchanged; increase; remain unchanged
D) increase; increase; increase
E) decrease; increase; remain unchanged

Correct Answer:

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