If the Government Wants to Decrease the Price Level and Real

question 61

Multiple Choice

If the government wants to decrease the price level and real output in an economy in the long run, it should engage in a(n) :

• A)increase in government purchases and transfer payments.
• B)increase in taxes and transfer payments
• C)decrease in taxes and an increase in transfer payments.
• D)increase in taxes and a decrease in government purchases.
• E)increase in government purchases and net exports.

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Definitions:

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