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The Equilibrium Effects of a Temporary Increase in Government Spending

Question 5

Multiple Choice

The equilibrium effects of a temporary increase in government spending include


A) an increase in the real wage and an increase in the real interest rate.
B) an increase in the real wage and a decrease in the real interest rate.
C) a decrease in the real wage and an increase in the real interest rate.
D) a decrease in the real wage and a decrease in the real interest rate.

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