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Consider a closed classical economy. Analyze the effects of a decrease in government purchases on the following. Please provide a brief explanation of your answer
Consider a closed classical economy. Analyze the effects of a decrease in government purchases on the following. Please provide a brief explanation of your answer (select the best answer in brackets)
1) Real output [ increase, decrease or no change ]
2) Consumption [ increase, decrease or no change ]
3) National saving [ increase, decrease or no change ]
4) Investment [ increase, decrease or no change ]
5) Real interest rate [ increase, decrease or no change ]
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