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Increase in deficit-financed govt

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Reference no: EM131452562

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?

Reference no: EM131452562

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