In the Long Run, a Decrease in the Budget Deficit

Multiple Choice

In the long run, a decrease in the budget deficit (caused by, for example, a decrease in government spending) will:

A) only affect the price level and the composition of output.
B) not affect the level of output, but does affect the composition of output.
C) only affect the price level.
D) cause an increase in the level of output.
E) cause a decrease in the level of output.