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A Reduction in Government Spending Causes the Equilibrium Level of Aggregate

Question 125

Multiple Choice

A reduction in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________,everything else held constant.


A) rise;LM;right
B) fall;IS;left
C) fall;LM;left
D) rise;IS;right

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