If There Is a Dollar-For-Dollar Direct Expenditure Offset, Then

question 57

Multiple Choice

If there is a dollar-for-dollar direct expenditure offset, then

• A) increases in aggregate demand will also increase long-run aggregate supply.
• B) increases in government spending will not increase aggregate demand.
• C) increases in aggregate demand will increase the price level, but leave real output unchanged.
• D) increases in aggregate demand will increase real output, but leave the price level unchanged.

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