An economist who claims that an increase in government spending would result mainly in a higher price level believes the economy is operating where the

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An economist who believes that an increase in government spending would result mainly in a higher price level is assuming that the aggregate supply curve is steep. This means that any increase in demand, such as from government spending, will result in a relatively large increase in the price level, with relatively little increase in output.

An Economist Who Claims That an Increase in Government Spending