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Expansionary and Contractionary Fiscal Policy
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Expansionary and Contractionary Fiscal Policy
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20. Fiscal Policy / Expansionary and Contractionary Fiscal Policy / Problem 8
Problem 8
In the AD-AS model, what is the effect of increased government spending on aggregate demand and price levels?
A
Aggregate demand shifts right, increasing price levels.
B
Aggregate demand shifts right, decreasing price levels.
C
Aggregate demand shifts left, decreasing price levels.
D
Aggregate demand remains unchanged, stabilizing price levels.
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