Question: In the traditional Keynesian model, a decrease in government spending lowers total planned real expenditures by more than the original decrease in government spending because

In the traditional Keynesian model, a decrease in government spending lowers total planned real expenditures by more than the original decrease in government spending because

consumption spending depends negatively on real GDP

.

consumption spending depends positively on real GDP

.

consumption spending is not related to real GDP

.

of the crowding

-

out effect on consumption spending.

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