Suppose the economy is in equilibrium on the LRAS curve and government spending increases.In the long run
A) prices and output will return to the original levels.
B) prices will increase,but output will return to the original level.
C) prices and output will increase.
D) output will increase and prices will decrease.
Correct Answer:
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Q25: If the government decreases government spending,then the
A)short-run
Q26: Suppose there is a contractionary gap and
Q27: If the government increases government spending,then the
A)short-run
Q28: If the government increases taxes,then the
A)short-run aggregate
Q29: Which of the following statements about fiscal
Q31: According to traditional Keynesian analysis,fiscal policy operates
Q32: If the government decreases taxes,then the
A)short-run aggregate
Q33: Suppose the economy is at a short
Q34: Suppose there is a contractionary gap and
Q35: Suppose the economy is at a short
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