Question: In the short run, how would a decrease in government spending affect the DD-AA equilibrium? a.It will decrease output and appreciate the home currency. b.It

In the short run, how would a decrease in government spending affect the DD-AA equilibrium?

a.It will decrease output and appreciate the home currency.

b.It will decrease output and depreciate the home currency.

c.It will increase output and appreciate the home currency.

d.It will increase output and depreciate the home currency.

e.Output and the exchange rate remain unchanged.

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