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Consider the AA-DD model. But now, assume that the government spending (G) depends positively on the level of output (Y) in the economy, i.e. all
Consider the AA-DD model. But now, assume that the government spending (G) depends positively on the level of output (Y) in the economy, i.e. all else equal, an increase in Y raises G. This modification leads to O a flatter DD curve and an unchanged AA curve. O a steeper DD curve and an unchanged AA curve. O a flatter DD curve and a steeper AA curve. O unchanged DD and AA curves. O an unchanged DD curve and a flatter AA curve
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