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Economic management — Question 27

Original QCE Vault practice · 1 mark

Q27 · Practice questionComplex familiar1 mark

QUESTION 27

When the economy is already close to capacity, a large construction stimulus may be less effective at raising real output because

(A)
government spending is never part of aggregate demand.
(B)
its multiplier must be exactly zero.
(C)
all spending necessarily leaks into saving.
(D)
it competes for scarce workers and materials.
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