(Answered) Suppose the government decided to tighten monetary policy

Economics

Suppose the government decided to tighten monetary policy and decrease government expenditures. In the short run in the Keynesian model, the effect of these policies would be to _____ the real interest rate and _____ the level of output.

(a) lower; decrease

(b) lower; have an ambiguous effect on

(d) raise; decrease

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