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c . Why is the change in GDP is not exactly equal to the change in government spending? The government's spending isn't as affective as
c Why is the change in GDP is not exactly equal to the change in government spending?
The government's spending isn't as affective as they intend it to be
Government spending increases consumer confidence, so consumers spend more.
Other transaction costs need to be accounted for in GDP
The government's spending becomes the income of other people, who then spend it and further increase GDP
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