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Suppose That the Government Decreases Its Expenditures on Goods and Services

question 127

Multiple Choice

Suppose that the government decreases its expenditures on goods and services. Within the AS-AD model, the result will be ________ in real GDP and ________ in the price level.


Definitions:

Purchasing Power

The real value of money, reflecting how much goods or services one unit of money can buy.

Period

A length or portion of time, often defined for specific calculations or measurements.

Ratio

A quantitative relationship between two numbers showing how many times one value contains or is contained within the other.

Express

To show, manifest, or reveal something through words, gestures, actions, or artistic expression.

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