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    Principles of Economics Study Set 1
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    Exam 25: Spending and Output in the Short Run
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    In the Basic Keynesian Model, an Increase in Transfer Payments
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In the Basic Keynesian Model, an Increase in Transfer Payments

Question 92

Question 92

Multiple Choice

In the basic Keynesian model, an increase in transfer payments:


A) reduces short-run equilibrium output.
B) increases short-run equilibrium output.
C) reduces potential output.
D) increases potential output.

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