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      Question

      Expansionary fiscal policy in the classical

      model will cause aggregate demand to-----potential output?
      A Exceed Correct Answer Incorrect Answer
      B Fall below Correct Answer Incorrect Answer
      C Remain equal to Correct Answer Incorrect Answer
      D Fluctuate around Correct Answer Incorrect Answer

      Solution

      Expansionary fiscal policy in the classical model will cause aggregate demand to remain equal to potential output

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