Multiple Choice
Suppose the economy is initially operating at full employment. A fiscal policy action that results in an increase in the size of the budget deficit will cause which of the following in the long run?
A) an increase in real GDP.
B) have no effect on both the level and composition of real GDP.
C) a reduction in the price level.
D) change the composition of real GDP.
Correct Answer:
Verified
Correct Answer:
Verified
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