Economics: The Basics 1st Edition by Mike Mandel

Exercise 10

The federal government cuts back on purchases of fighter planes but makes no other changes in taxation or spending. Say whether each of the following is likely to be true or false in the short run.
a) Federal spending rises.
b) Employment at companies making fighter planes falls.
c) Employment in the whole economy falls.
d) GDP declines.
e) The budget deficit decreases.