The Canadian government increases its expenditure on goods and services in a time of war or increased international tension. Starting from a position of long-run equilibrium, what effect does this event have on Canada's economy in the short run? Real GDP increases and the price level rises. Real GDP decreases and the price level falls. Real GDP increases and the price level falls Real GDP decreases and the price level rise There is no change in either real GDP or the price level.

The Canadian government increases its expenditure on goods and services in a time of war or increased international tension. Starting from a position of long-run equilibrium, what effect does this event have on Canada's economy in the short run? Real GDP increases and the price level rises. Real GDP decreases and the price level falls. Real GDP increases and the price level falls Real GDP decreases and the price level rise There is no change in either real GDP or the price level.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter10: Dynamic Change, Economic Fluctuations, And The Ad-as Model

Section: Chapter Questions

Problem 12CQ

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