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The Federal Government Undertakes a Large Military Buildup; the Economy

Question 72

Multiple Choice

The federal government undertakes a large military buildup; the economy is at its potential level of output, all other things equal, the impact on the long-run real interest rate will be to:


A) Increase
B) Decrease
C) Remain constant since output is at its potential level
D) Change at the same rate as inflation

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