Suppose the Government Decided to Tighten Monetary Policy and Decrease

Multiple Choice

Suppose the government decided to tighten monetary policy and decrease government expenditures.In the short run in the Keynesian model,the effect of these policies would be to ________ the real interest rate and ________ the level of output.

A) lower; decrease
B) lower; have an ambiguous effect on
C) have an ambiguous effect on; decrease
D) raise; decrease