A decrease in government purchases will lead to
A)a lower output and price level in the short run but a higher output and price level in the long run.
B)a lower output and price level in the short run but the same output and price level in the long run.
C)a lower output and price level in the short run but a higher output and lower price level in the long run.
D)a lower output and price level in the short run but the same output and lower price level in the long run.

Question

Quizplus · Accepted Answer

The Answer of A decrease in government purchases will lead to
A)a lower output and price level in the short run but a higher output and price level in the long run.
B)a lower output and price level in the short run but the same output and price level in the long run.
C)a lower output and price level in the short run but a higher output and lower price level in the long run.
D)a lower output and price level in the short run but the same output and lower price level in the long run.

A Decrease in Government Purchases Will Lead to