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In the Short Run,following an Increase in Government Purchases

Question 155

Multiple Choice

In the short run,following an increase in government purchases,


A) the aggregate expenditure line shifts upward by more than the increase in government purchases
B) real GDP declines by the change in government purchases times the expenditure multiplier
C) the money supply curve shifts rightward because real income rises
D) the interest rate rises because the money demand curve shifts rightward
E) autonomous consumption and investment increase because of the increase in real income

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