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When the Spending of Consumers, Businesses, Government, and Foreigners (Net

Question 88

Multiple Choice

When the spending of consumers, businesses, government, and foreigners (net exports) is less than the current level of output, Keynesian analysis indicates that


A) the economy's output will fall short of its potential.
B) prices will rise.
C) equilibrium real GDP will increase.
D) inventories will decline.

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