Assume the Economy Is Initially Operating at the Natural Level

question 65

Multiple Choice

Assume the economy is initially operating at the natural level of output.Now suppose a budget is passed that calls for an increase in government spending.This increase in government spending will,in the medium run,have NO effect on which of the following?

• A)employment
• B)the interest rate
• C)the price level
• D)all of the above
• E)none of the above