According to the IS-MP-PC model, an increase in public expenditure, G, fully funded by an increase in taxation, T, causes
A)a temporarily lower GDP.
B)lower inflation.
C)no temporary change in GDP.
D)a temporarily higher GDP.

Question

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The Answer of According to the IS-MP-PC model, an increase in public expenditure, G, fully funded by an increase in taxation, T, causes
A)a temporarily lower GDP.
B)lower inflation.
C)no temporary change in GDP.
D)a temporarily higher GDP.

According to the IS-MP-PC Model, an Increase in Public Expenditure