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:

Means of Production

The resources and tools used to produce goods and services, including land, labor, and capital, a concept central to Marxist theory.

Agricultural Revolution

The social and economic changes, including population increases, that followed from the domestication of plants and animals and the gradually increasing efficiency of food production.

Mechanized Seed Spreaders

Agricultural tools or machines designed for distributing seeds over the soil in an efficient and uniform manner, enhancing sowing processes.

Crop Rotation

A farming practice that involves growing different types of crops in the same area across a sequence of seasons to improve soil health and reduce pest and weed pressure.