Non-discretionary fiscal policies that increase aggregate demand tend to result in

Question

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Non-discretionary fiscal policies that increase aggregate demand, such as an increase in government spending or a reduction in taxes, will result in higher Real GDP and a higher price level. The increase in aggregate demand will increase the output of goods and services, leading to an increase in Real GDP. However, the increase in demand may also lead to inflationary pressure, resulting in a higher price level.

Non-Discretionary Fiscal Policies That Increase Aggregate Demand Tend to Result