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Figure: Classical Versus Keynesian Macroeconomics
-(Figure: Classical Versus Keynesian Macroeconomics) Look at the figure Classical Versus Keynesian Macroeconomics. According to the Keynesian view, if this economy shifts from AD₂ to AD₁, perhaps because of a large increase in government spending, the price level will _____ and real GDP will _____.

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Figure: Classical Versus Keynesian Macroeconomics

-(Figure: Classical Versus Keynesian Macroeconomics) Look at the figure Classical Versus Keynesian Macroeconomics. According to the Keynesian view, if this economy shifts from AD₂ to AD₁, perhaps because of a large increase in government spending, the price level will _____ and real GDP will _____.

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According to the Keynesian view, an increase in aggregate demand (AD) from AD2 to AD1 due to factors like increased government spending will lead to both an increase in the price level and an increase in real GDP, as the economy moves towards full employment.

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