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  • Card 5 / 8:
    Use the AD/AS model to show how increases in government spending can lead to more inflation.

    An increase in government spending shifts the AD curve to the right, raising both income and price levels.

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Source:  OpenStax, Macroeconomics. OpenStax CNX. Jun 16, 2014 Download for free at http://legacy.cnx.org/content/col11626/1.10
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