Use the following to answer questions: 
-(Figure: Fiscal Policy II) Refer to Figure: Fiscal Policy II. Suppose that this economy is in equilibrium at E1. If there is a decrease in government purchases, _____ will shift to the _____, causing a(n) _____ in the price level and a(n) _____ in real GDP.
Definitions:
Cost Of Goods Sold
The total cost directly linked to the production or purchase of goods that have been sold in a period.
Ending Finished Goods Inventory
The value of products available for sale at the end of an accounting period, after all manufacturing costs are accounted for.
Fixed
Refers to something that is unchanging and stable, often used in the context of expenses or assets that do not vary with production volume.
Variable
An element, feature, or factor that is likely to vary or change; in scientific experiments, this is the factor being tested or measured.
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