"The Only Thing That Results from Expansionary Demand-Side Fiscal Policy

question 100

Multiple Choice

"The only thing that results from expansionary demand-side fiscal policy is that the price level will rise." The economist who said this most likely believes that

• A) there is likely to be a lot of crowding out if government spending rises.
• B) the AS curve is vertical.
• C) there is unlikely to be much crowding out if government spending rises.
• D) investment is interest inelastic.
• E) b and c

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