Suppose Congress Decides to Reduce Government Expenditures by Reducing Its

Multiple Choice

Suppose Congress decides to reduce government expenditures by reducing its purchases of weapons systems. Which of the following would you expect to occur as a result of this change?

A) The economy will move up and to the left along the short-run Phillips Curve.
B) The economy will move down and to the right along the short-run Phillips Curve.
C) ​The short-run Phillips Curve will shift to the left.
D) ​The short-run Phillips Curve will shift to the right.