67. Suppose that there is a sudden drop in government spending. What happens to the economy in the short-run, assuming it was originally at its long-run equilibrium? (A) GDP and prices fall. (B) GDP falls and prices rise. (C) GDP and prices rise. (D) GDP rises and prices fall.
67. Suppose that there is a sudden drop in government spending. What happens to the economy in the short-run, assuming it was originally at its long-run equilibrium? (A) GDP and prices fall. (B) GDP falls and prices rise. (C) GDP and prices rise. (D) GDP rises and prices fall.
Chapter1: Making Economics Decisions
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67 Need help ASAP
![67. Suppose that there is a sudden drop in government spending. What happens to the
economy in the short-run, assuming it was originally at its long-run equilibrium?
(A) GDP and prices fall.
(B) GDP falls and prices rise.
(C) GDP and prices rise.
(D) GDP rises and prices fall.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9bed4100-ace7-416c-b6fe-42399943bc75%2F198bc22e-afad-4264-94c9-ac3c4816cb07%2Fyl057ro_processed.jpeg&w=3840&q=75)
Transcribed Image Text:67. Suppose that there is a sudden drop in government spending. What happens to the
economy in the short-run, assuming it was originally at its long-run equilibrium?
(A) GDP and prices fall.
(B) GDP falls and prices rise.
(C) GDP and prices rise.
(D) GDP rises and prices fall.
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