Which of the Following Statements About Fiscal Policy Is True

question 169

Multiple Choice

Which of the following statements about fiscal policy is true?

• A) Real Gross Domestic Product (GDP) can be increased above its long-run equilibrium only in the short run.
• B) Real Gross Domestic Product (GDP) can never be increased above its long-run equilibrium, even for a brief period of time.
• C) Government can shift the aggregate demand curve inward by increasing spending.
• D) Government can shift the aggregate demand curve outward by reducing spending.

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