Suppose the economy is at point C in Figure 15.1.If government spending decreases in the economy,where will the eventual long-run equilibrium be?
A) A
B) B
C) C
D) D

Question

Quizplus · Accepted Answer

A decrease in government spending will shift the aggregate demand curve to the left, leading to a new long-run equilibrium at a lower output level, which is typically represented by point A in such diagrams.

Suppose the Economy Is at Point C in Figure 15