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If There Are Perfectly Flexible Prices and the Economy Is

Question 26

Multiple Choice

If there are perfectly flexible prices and the economy is operating at Y(N) ,then an increase in government expenditures


A) will increase real GDP and the price level.
B) will increase nominal GDP and the raise price level.
C) will not lead to complete real crowding out.
D) will lead to complete nominal crowding out and have the price level unchanged.

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