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In the monetary intertemporal model, suppose that the government raises its spending financed by borrowing, leading to an increase in the aggregate output demand. The
In the monetary intertemporal model, suppose that the government raises its spending financed by borrowing, leading to an increase in the aggregate output demand. The money supply is unchanged. The price level will ________
A.increase if the real interest rate does not change.
B.increase if the real interest rate rises.
C.remain unaffected if the real interest rate does not change.
D.decrease if the real interest rate does not change.
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