If government spending increases, which of the following is most likely to occur?
a. GDP, money demand, the interest rate, and investment spending will all increase.
b. GDP, money demand, the interest rate, and investment spending will all decrease.
c. GDP, money demand and the interest rate will increase, while investment spending will decrease.
d. GDP, money demand and the interest rate will decrease, while investment spending will increase.
e. GDP and money demand will increase, but the interest rate will not change.
C
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