Question

<pre class=”ql-syntax”><span class=”hljs-attribute”>In</span> the long run,

most economists agree that a <span class=”hljs-literal”>permanent</span> increase in government spending leads to ________ crowding out of private spending. A. more than complete B. complete C. <span class=”hljs-literal”>no</span> D. partial If the government purchases multiplier equals <span class=”hljs-number”>2</span>, and real GDP is <span class=”hljs-variable”>$14</span> trillion with potential real GDP <span class=”hljs-variable”>$14</span>.<span class=”hljs-number”>5</span> trillion, then government purchases would need to increase by ________ to restore the economy to potential real GDP. A. <span class=”hljs-variable”>$7</span>.<span class=”hljs-number”>25</span> trillion B. <span class=”hljs-variable”>$500</span> billion C. <span class=”hljs-variable”>$1</span> trillion D. <span class=”hljs-variable”>$250</span> billion </pre>

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