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If the Price Level Is Fixed, Then a Decrease in Government

Question 43

Multiple Choice

If the price level is fixed, then a decrease in government spending will lead to


A) a larger decrease in nominal GDP than in real GDP.
B) a smaller decrease in nominal GDP than in real GDP.
C) no decrease in either nominal GDP or real GDP.
D) a decrease in nominal GDP by the same amount as a decrease in real GDP.

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