If the Shifts in AD That Will Result from Policy

Multiple Choice

If the shifts in AD that will result from policy changes are fully and accurately anticipated, a decrease in government purchases or an increase in taxes would result in which of the following in the short run?

A) ​a higher level of real output and a higher price level
B) ​a higher level of real output but no change in the price level
C) ​a higher price level and a reduced level of real output
D) ​none of the above.