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    Exam 13: Fiscal Policy
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    When Real GDP Is Less Than Potential GDP, an Increase
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When Real GDP Is Less Than Potential GDP, an Increase

Question 101

Question 101

Multiple Choice

When real GDP is less than potential GDP, an increase in government expenditures will ________ real GDP and ________ the price level.


A) increase; raise
B) increase; lower
C) decrease; raise
D) decrease; lower

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