In the short run,a decrease in government purchases would
A) decrease real GDP because of the multiplier effect and price level changes,but be offset somewhat by decreases in the interest rate
B) decrease real GDP because of the increases in the price level and increases in the interest rate
C) decrease real GDP because of the multiplier effect and increase in the interest rate,but be offset somewhat by decreases in the price level
D) decrease real GDP because of the multiplier effect,but be offset somewhat by decreases in the price level and the interest rate
E) not change output because of the multiplier effect;price level and interest rate changes completely cancel each other out.
Correct Answer:
Verified
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