Consider a hypothetical country in which, initially, real GDP equals potential GDP. Suppose that the government purchases
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Question:
Consider a hypothetical country in which, initially, real GDP equals potential GDP. Suppose that the government purchases increase. All else equal (with regard to the AD-IA model), relative to the short-run level, in the medium run, output is:
A. higher.
B. lower.
C. the same.
Related Book For
Multinational Finance Evaluating Opportunities Costs and Risks of Operations
ISBN: 978-1118270127
5th edition
Authors: Kirt C. Butler
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