If Oil Prices Fall at the Same Time That the Federal

question 45

Multiple Choice

If oil prices fall at the same time that the federal government increases its spending, in the short run

• A)aggregate output and the price level will both increase.
• B)aggregate output will increase, but the price level will fall.
• C)aggregate output and the price level will both fall.
• D)aggregate output will increase, but the price level may either increase or decrease.

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Polzer, Mannix

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