In the Basic Model That Includes the AD and LRAS

question 287

Multiple Choice

In the basic model that includes the AD and LRAS curves only, increased spending growth causes:

• A) a lower inflation rate, but no change in the real growth rate.
• B) a higher inflation rate, but no change in the real growth rate.
• C) a lower real growth rate, but no change in the inflation rate.
• D) a higher real growth rate, but no change in the inflation rate.

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