When Government Purchases Decrease, the Short-Run Effect Can Be Described

question 66

Multiple Choice

When government purchases decrease, the short-run effect can be described as the period of time when

• A)there is no spending balance.
• B)inflation is constant.
• C)real GDP and inflation are adjusting to their new long-run levels.
• D)real GDP is below potential GDP.
• E)the inflation adjustment line has not reached the new intersection of aggregate demand at the level of potential GDP.

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Definitions:

Pax Augusta

A term referring to the peace within the Roman Empire under Emperor Augustus, also known as Pax Romana, that lasted from 27 BCE to 180 CE.

Ara Pacis Augustae

An altar in Rome dedicated to Pax, the Roman goddess of peace, commissioned by the Senate to honor Augustus' return and known for its intricate relief sculptures depicting Roman virtues and imperial processions.

Maison Carrée

An ancient Roman temple in Nîmes, France, well preserved and notable for its classical architecture and historical significance.

Pantheon

An ancient Roman temple in Rome, Italy, dedicated to all the gods of pagan Rome, now a church, renowned for its massive dome and oculus.