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Answer to Question #247722 in Macroeconomics for kYLO
Question #247722
Which one of the following is correct regarding contractionary fiscal policy in the Keynesian model? It will…
- A. decrease the equilibrium level of income.
- B. increase government spending and aggregate spending.
- C. decrease investment and government spending.
- D. decrease inventories.
Expert's answer
C. It will decrease investment and government spending.
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