?

AP® Macroeconomics

Free Version

Upgrade subject to access all content

Difficult

Fiscal Policy: Contractionary Fiscal Policy

APMACR-C3ISFQ

Suppose Country A needs to implement a contractionary monetary policy, what would happen to output and price level in the short run?

A

There would be no change in either price level or output.

B

Price level would increase, but output would decrease.

C

Both price level and output would decrease.

D

Price level would decrease, but output would increase.

E

There would be no change in price level, but output would increase.