Multiple Choice
A temporary decrease in government purchases causes the real interest rate to ________ and output to ________ in the short run,before prices adjust to restore equilibrium.
A) rise; rise
B) rise; fall
C) fall; rise
D) fall; fall
Correct Answer:

Verified
Correct Answer:
Verified
Related Questions
Q93: Which of the following changes shifts the
Q94: An increase in money supply causes the
Q95: Suppose the intersection of the IS and
Q96: You have just read that the Federal
Q97: Looking only at the asset market,an increase
Q99: To reach general equilibrium,the price level adjusts
Q100: Classical economists believe that a market economy
Q101: After a temporary beneficial supply shock hits
Q102: Suppose the intersection of the IS and
Q103: Banks decide to raise the interest rate