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Suppose the Economy Is at a Position Below the Institutional

Question 3

Multiple Choice

Suppose the economy is at a position below the institutional production possibilities frontier.In response to this situation,Keynesian economists would propose that the government should __________ expenditures,which will cause the aggregate demand curve to shift to the __________ in an attempt to close this __________ gap.


A) decrease; left; inflationary
B) increase; right; inflationary
C) decrease; right; inflationary
D) increase; right; recessionary
E) decrease; left; recessionary

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