Suppose the Government Permanently Reduces Spending in an Effort to Reduce

question 21

Multiple Choice

Suppose the government permanently reduces spending in an effort to reduce the budget deficit. In the new long-run equilibrium, output will ________ and the price level will ________.

• A) decrease; decrease
• B) remain unchanged; decrease
• C) remain unchanged; increase
• D) decrease; remain unchanged
• E) increase; decrease

---

Definitions:

References Page

A section at the end of a document that lists the sources of information, such as books, articles, and websites, cited by the author.

Correctly Formatted

Presentation of documents or data in accordance with specified or standard formats.

APA Guidelines

Standards set by the American Psychological Association for formatting and citing sources in research papers and publications.

References Page

A section at the end of a document where the sources, citations, or bibliographic information are listed.