A decrease in government spending will cause a(n):

Name: A decrease in government spending will cause a(n):
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Question

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A decrease in government spending means there is less government demand for goods and services, leading to a decrease in aggregate demand since government spending is a component of aggregate demand. This can lead to a decrease in the quantity of output demanded in the short-term, as businesses may reduce their production levels in response to the lower overall demand in the economy.

A Decrease in Government Spending Will Cause A(n)