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Business, 03.03.2022 03:40 daisa02

An expansionary fiscal policy is intended to increase aggregate demand. However, such a policy can also cause higher interest rates if the expansionary fiscal policy is deficit financed. If this is the case, then . Select the correct answer below:

firms and households might spend more, which could reduce aggregate demand

firms and households might spend more, which could increase aggregate demand

firms and households might spend less, which could reduce aggregate demand

firms and households might spend less, which would increase aggregate demand

what is the correct answer

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