In the short run, a decrease in government purchases would

Select one:

a.decrease real GDP because of the multiplier effect, but be offset somewhat by decreases in the price level and the interest rate

b.decrease real GDP because of the multiplier effect and price level changes, but be offset somewhat by decreases in the interest rate

c.decrease real GDP because of the multiplier effect and increase in the interest rate, but be offset somewhat by decreases in the price level

d.decrease real GDP because of the increases in the price level and increases in the interest rate

e.not change output because of the multiplier effect; price level and interest rate changes completely cancel each other out

The Phillips curve reflects

Select one:

a.short-run fluctuations in GDP

b.short- and long-run tradeoffs between unemployment and inflation

c.the long-run tradeoff between inflation and unemployment

d.the short-run tradeoff between inflation and unemployment

e.the income distribution effects of inflation

If equilibrium GDP is below potential, then

Select one:

a.the wage rate will remain stable as labor productivity increases

b.unemployment is unusually low

c.the aggregate supply curve will shift leftward

d.the wage rate will fall as workers compete for scarce jobs

e.the Central Bank will lower the money supply