A decrease in government purchases causes the interest-sensitive components of aggregate expenditure to increase in the short run.

Name: A decrease in government purchases causes the interest-sensitive components of aggregate expenditure to increase in the short run.
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Question

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A decrease in government purchases would cause a decrease in aggregate expenditure, and the interest-sensitive components (such as investment) would likely also decrease, not increase.

A Decrease in Government Purchases Causes the Interest-Sensitive Components of Aggregate