If Congress increases government spending: What will be the effect on money demand, money supply, and interest
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Question:
If Congress increases government spending:
- What will be the effect on money demand, money supply, and interest rates? Please explain.
- What will be the effect on AE, and GDP? Please explain
- In the short-run: What will be the effect on the average price level? Please briefly explain.
Expert Answer:
1 Effect on Money Demand Money Supply and Interest Rates Money Demand An expansion in government spending commonly prompts an expansion in by and larg... View the full answer
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