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Starting from Long-Run Equilibrium,a Large Decrease in Government Purchases Will

Question 27

Multiple Choice

Starting from long-run equilibrium,a large decrease in government purchases will result in a(n) _________ gap in the short run,and ________ inflation and ________ output in the long run.


A) expansionary;higher;potential
B) expansionary;lower;potential
C) expansionary;higher;higher
D) recessionary;higher;potential
E) recessionary;lower;potential

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