Consider the long-run theory of investment,saving,and growth.For a given level of private saving,an increase in government purchases will likely ________ the economy's long-run growth rate.

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According to the long-run theory of investment, saving, and growth, an increase in government purchases leads to a decrease in the economy's long-run growth rate. This is because resources that could have been invested in productive capacity are diverted towards government purchases, which do not contribute to long-run growth. Therefore, an increase in government purchases will likely slow down the economy's long-run growth rate.

Consider the Long-Run Theory of Investment,saving,and Growth