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In the Long-Run Growth Model, a Decline in Defense Spending

Question 46

Multiple Choice

In the long-run growth model, a decline in defense spending would


A) lead to an increase in real GDP in the short run.
B) lead to a fall in real GDP in the short run, unless it were offset by increased government spending.
C) have no significant impact on real GDP in the short run.
D) lead to a fall in real GDP whether it were offset by increased government spending or not.
E) none of the above.

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