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Suppose That the Government Decreases Its Expenditures on Goods and Services

Question 127

Multiple Choice

Suppose that the government decreases its expenditures on goods and services. Within the AS-AD model, the result will be ________ in real GDP and ________ in the price level.


A) an increase; an increase
B) an increase; a decrease
C) a decrease; an increase
D) a decrease; a decrease

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