A Reduction in Government Spending Causes the Equilibrium Level of Aggregate

question 125

Multiple Choice

A reduction in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________,everything else held constant.

• A)rise;LM;right
• B)fall;IS;left
• C)fall;LM;left
• D)rise;IS;right

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Definitions:

Working Class

A social group consisting of people who are employed in low-paying wage jobs, often involving manual or industrial labor, and lacking significant economic or political power.

Blue Jeans

A type of casual pants made from denim, originally designed as workwear but now widely worn for various occasions.

Slacks

is a term commonly used to refer to pants that are relatively formal, not jeans, and typically worn in professional or business settings.

Research Cycle

The research cycle is a series of steps that guide the process of conducting scientific research, from the initial question formulation through to dissemination of findings.