What effect will a decrease in government spending and an increase in taxes have on price level and employment? Price Level Employment Increase increase Increase no change Increase decrease Decrease increase Decrease decrease
Added by Margarita M.
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A decrease in government spending typically leads to a reduction in overall demand in the economy. When the government spends less, it means there is less money circulating in the economy, which can lead to lower consumption and investment. Show more…
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