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Economics (AS & A Level) · Oct / Nov 2023 · Paper 32 · Question 20

9708Fiscal policy

What is likely to be the effect of an increase in the budget deficit?

  1. Aan increase in effective demand
  2. Ban increase in unemployment
  3. Ca reduction in inflation
  4. Da reduction in the volume of spending

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Correct answer: A. an increase in effective demand

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