12. Suppose the government increases spend ing and finances the spending by printing money. What are the

Question:

12. Suppose the government increases spend¬ ing and finances the spending by printing money. What are the short-run and long- run macroeconomic effects on

(a) the in¬ terest rate,

(b) the exchange rate,

(c) the price level, and

(d) real GDP?

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