When Drawn Against the Real Interest Rate, the Output Supply

question 4

Multiple Choice

When drawn against the real interest rate, the output supply curve unambiguously shifts to the right if either or both of the following occur.

• A) an increase in current government spending and an increase in future government spending
• B) an increase in current government spending and a decrease in future government spending
• C) a decrease in current government spending and an increase in future government spending
• D) a decrease in current government spending and a decrease in future government spending
• E) a decrease in current government spending and an increase in the real interest rate

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