Question: Which of the statement below is FALSE? A; Increase in government spending will cause price and output to increase B; The multiplier effects explain why

Which of the statement below is FALSE?

A; Increase in government spending will cause price and output to increase

B; The multiplier effects explain why equilibrium income increases by more than the amount of increase in government spending

C; Inflationary gap will cause price to increase yet quantity to be lesser than the full-employment level

D; Deflationary gap takes place when equilibrium income is lower than the potential level at full-employment

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