Refer to the Information Provided in Figure 18

Multiple Choice

Refer to the information provided in Figure 18.1 below to answer the questions that follow.
Figure 18.1
-Refer to Figure 18.1.According to the new classical economists,under rational expectations an expected decrease in government spending would

A) shift AS₁ to the right.
B) shift AD₁ to the right.
C) shift AD₁ to the left.
D) not change AD and AS.