In a Closed Economy, an Expansionary Fiscal Policy

Multiple Choice

In a closed economy, an expansionary fiscal policy:

A) leads to an increase in both domestic output and the price level.
B) leads to a decrease in both domestic output and the price level.
C) leads to an increase in domestic output and a decrease in the price level.
D) leads to a decrease in domestic output and an increase in the price level.
E) has no effect on private investment.