If the Price Level Is Fixed, Then an Increase in Government

question 39

Multiple Choice

If the price level is fixed, then an increase in government spending will lead to

• A)a larger increase in nominal GDP than in real GDP.
• B)a smaller increase in nominal GDP than in real GDP.
• C)no increase in either nominal GDP or real GDP.
• D)an increase in nominal GDP by the same amount as an increase in real GDP.

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