Solved: 1 the increase in deficit-financed govt spending causes, Business Economics

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1 the increase in deficit-financed govt spending causes

According to Keynesian economists, which of the following is true in this case?

1. The increase in deficit-financed govt spending causes real GDP to increase to natural real GDP.

2. The increase in deficit-financed govt spending causes real GDP to increase, but not to natural real GDP.

3. The increase in deficit-financed govt spending has no impact on real GDP or the price level.

4. Real GDP does not increase, only the price level increases.

This is an example of what?

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Business Economics: 1 the increase in deficit-financed govt spending causes

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