In the IS - LM framework, under general recessionary condition, as government expenditure (G) rises,
A. As Bond price (p_b) falls, rate of interest (r) rises, reducing the level of investment (I).
B. Aggregate demand for commodities rises, raising the level of aggregate output & income (Y).
C. Fall in private investment (I) reduces aggregate income.
D. People sell bond (b) to get money & hence bond supply (Bs) rises, reducing bond price (p_b).
E. Transaction demand for money (L1) rises, creating money demand greater than money supply (L>M).
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