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-Refer to Exhibit 10-6

Question 147

Multiple Choice

-Refer to Exhibit 10-6.If government purchases decrease,it follows that A) the TE curve will shift upward,possibly passing through point 2. B) the TE curve will shift downward,possibly passing through point 3. C) the TE curve will not change but the economy will move from point 1 to point 3. D) the TE curve will not change but the economy will move from point 1 to point 2. E) At the new equilibrium position,Real GDP will necessarily be Q<sub>3</sub>.
-Refer to Exhibit 10-6.If government purchases decrease,it follows that


A) the TE curve will shift upward,possibly passing through point 2.
B) the TE curve will shift downward,possibly passing through point 3.
C) the TE curve will not change but the economy will move from point 1 to point 3.
D) the TE curve will not change but the economy will move from point 1 to point 2.
E) At the new equilibrium position,Real GDP will necessarily be Q3.

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