In the aggregate demand-aggregate supply model, an increase in government purchases of goods and services will

a.
raise both the equilibrium price level and equilibrium output in the long run;

b.
reduce both the equilibrium price level and equilibrium output in the short run;

c.
raise equilibrium output but leave the equilibrium price level unaffected in the long run;

d.
raise both the equilibrium price level and equilibrium output in the short run;

e.
reduce the equilibrium price level but will leave equilibrium output unaffected in the short run.

Question

In the aggregate demand-aggregate supply model, an increase in government purchases of goods and services will

	a.	raise both the equilibrium price level and equilibrium output in the long run;
	b.	reduce both the equilibrium price level and equilibrium output in the short run;
	c.	raise equilibrium output but leave the equilibrium price level unaffected in the long run;
	d.	raise both the equilibrium price level and equilibrium output in the short run;
	e.	reduce the equilibrium price level but will leave equilibrium output unaffected in the short run.

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