Refer to the setup of 2 questions ago. An increase in government spending would Group of answer choices A) cause a recession. B) increase real GDP in the long run, but not the short run. C) cause inflation in the short run. D) not increase real GDP in the short or long run because there would be complete crowding out. E) increase real GDP in the short run, but not the long run.

Refer to the setup of 2 questions ago. An increase in government spending would Group of answer choices A) cause a recession. B) increase real GDP in the long run, but not the short run. C) cause inflation in the short run. D) not increase real GDP in the short or long run because there would be complete crowding out. E) increase real GDP in the short run, but not the long run.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section10.3: The Simple Keynesian Model In The Ad-as Framework

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Question

Refer to the setup of 2 questions ago. An increase in government spending would

Group of answer choices

A) cause a recession.

B) increase real GDP in the long run, but not the short run.

C) cause inflation in the short run.

D) not increase real GDP in the short or long run because there would be complete crowding out.

E) increase real GDP in the short run, but not the long run.

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