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Suppose That in Year 2 There Was a Higher Federal

Question 103

Multiple Choice

Suppose that in Year 2 there was a higher federal budget deficit than in Year 1. This could be explained by _ in Year 2.


A) lower real GDP (with fiscal policy constant)
B) lower real interest rates.
C) higher real GDP (with fiscal policy constant)
D) a lower primary budget surplus
E) lower government expenditure (with real GDP constant)

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