Government spending in a closed economy fiscal policy action

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Reference no: EM13694599

Suppose there is a decrease in government spending in a closed economy fiscal policy action will cause:

A. the natural real interest rate to rise

B. the natural real interest rate to fall

C. ambiguous effects on the natural real interest rate

D. no effect on the natural real interest rate

E. the natural real interest rate rises when the nominal rate falls

Reference no: EM13694599

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