AS-AD model:
Which one is the correct?
When gov. reduces deficits by increasing taxes…
in the short run, output decreases, and in the medium run, output Returns to potential
in the short run, Government expenditures increase and thus in the medium run, output increases
in the short run, interest rate is higher, and in the medium run, the effect of consolidation Policy on Investment is not clear
in the short run, IS curve shifts inward to the left and in the medium run, it shifts back to its original Position due to increase in investment
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