If the government decreases aggregate demand when the economy is at both short-run and long-run equilibrium,the full long-run effect of this fiscal policy will be to
A) decrease real GDP.
B) decrease the price level.
C) decrease either the real GDP or the price level,depending on the length of the time lag.
D) decrease both real GDP and the price level.
Correct Answer:
Verified
Q16: Expansionary fiscal policy is designed to
A)increase real
Q17: If the government decreases spending to move
Q18: Contractionary fiscal policy is designed to
A)reduce real
Q19: If the government wants to increase real
Q20: Which of the following statements about fiscal
Q22: Suppose the economy is at a short
Q23: Suppose the economy is at an equilibrium
Q24: Suppose the economy is at a short
Q25: If the government decreases government spending,then the
A)short-run
Q26: Suppose there is a contractionary gap and
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