If the government decreases government expenditures, what happens to prices and unemployment in the short run?

Question

Quizplus · Accepted Answer

When the government decreases its expenditures, it reduces the amount of money flowing in the economy, which can lead to lower prices due to decreased demand for goods and services. However, this can also lead to a decrease in economic activity and a rise in unemployment. Therefore, prices fall and unemployment rises in the short run.

If the Government Decreases Government Expenditures, What Happens to Prices