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In the Medium Run, a Fiscal Expansion That Causes an Increase

Question 3

Multiple Choice

In the medium run, a fiscal expansion that causes an increase in the budget deficit will affect which of the following?


A) Only the composition of output.
B) The level of output but not its composition.
C) The level of employment but not its composition.
D) Both the level and composition of output.
E) Both the level and composition of employment.

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