In the Long Run, an Increase in the Budget Deficit

Multiple Choice

In the long run, an increase in the budget deficit (caused by, for example, an increase in government spending) will:

A) cause a decrease in the level of output.
B) only affect the price level and the composition of output.
C) only affect the price level.
D) not affect the level of output, but does affect the composition of output.
E) cause an increase in the level of output.