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If There Is a Dollar-For-Dollar Direct Expenditure Offset, Then

Question 57

Multiple Choice

If there is a dollar-for-dollar direct expenditure offset, then


A) increases in aggregate demand will also increase long-run aggregate supply.
B) increases in government spending will not increase aggregate demand.
C) increases in aggregate demand will increase the price level, but leave real output unchanged.
D) increases in aggregate demand will increase real output, but leave the price level unchanged.

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