Question: Assuming that real and potential GDP are initially equal, an increase in government purchases Select one: a. has a negative effect on real GDP in

Assuming that real and potential GDP are initially equal, an increase in government purchases

Select one:

a. has a negative effect on real GDP in the long run

b. results in a higher rate of inflation in the long run

c. results in a lower rate of inflation in the long run

d. has a positive effect on real GDP in the long run

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