Suppose an economy is in long-run equilibrium when a fiscally conservative government cut expenditures. As a result Multiple Choice aggregate supply will decrease and real GDP will increase in the short run. aggregate supply will increase and real GDP will increase in the short run. aggregate demand will decrease and real GDP will decrease in the short run. aggregate demand will decrease and real GDP will increase in the short run.
Suppose an economy is in long-run equilibrium when a fiscally conservative government cut expenditures. As a result Multiple Choice aggregate supply will decrease and real GDP will increase in the short run. aggregate supply will increase and real GDP will increase in the short run. aggregate demand will decrease and real GDP will decrease in the short run. aggregate demand will decrease and real GDP will increase in the short run.
Chapter24: Fiscal Policy
Section: Chapter Questions
Problem 3P
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![Suppose an economy is in long-run equilibrium when a fiscally conservative
government cut expenditures. As a result
Multiple Choice
aggregate supply will decrease and real GDP will increase in
the short run.
aggregate supply will increase and real GDP will increase in
the short run.
aggregate demand will decrease and real GDP will decrease in
the short run.
aggregate demand will decrease and real GDP will increase in
the short run.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0173021b-6362-4383-be96-00e4154fae41%2Fe081c2c7-f7fa-4052-b542-469826589572%2Frugg2we_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose an economy is in long-run equilibrium when a fiscally conservative
government cut expenditures. As a result
Multiple Choice
aggregate supply will decrease and real GDP will increase in
the short run.
aggregate supply will increase and real GDP will increase in
the short run.
aggregate demand will decrease and real GDP will decrease in
the short run.
aggregate demand will decrease and real GDP will increase in
the short run.
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