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    Question

    In case of full Crowding out effect what is the shape of the LM curve

    A Horizontal Correct Answer Incorrect Answer
    B Vertical Correct Answer Incorrect Answer
    C Upward Sloping Correct Answer Incorrect Answer
    D Curvilinear Correct Answer Incorrect Answer

    Solution

    In case of vertical LM, government expenditure will not increase output. [Full Crowding out].

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