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Which of these effects of expansionary spending would a government most want to avoid?
higher employment
higher inflation
growth in production
growth in consumer spending
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GPT-5 mini
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Higher inflation.
While expansionary spending aims to raise employment, production, and consumer spending, excessive inflation is undesirable because it erodes purchasing power, creates uncertainty, and can force tighter monetary policy.
While expansionary spending aims to raise employment, production, and consumer spending, excessive inflation is undesirable because it erodes purchasing power, creates uncertainty, and can force tighter monetary policy.
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