If a government adopted a fiscal policy of cutting its budget deficit, the aggregate demand and supply model shows that the result would be:


If a government adopted a fiscal policy of cutting its budget deficit, the aggregate demand and supply model shows that the result would be:
A . a shift in the aggregate demand curve to the right, a fall in output and employment and a rise in the price level
B . a shift in the aggregate demand curve to the left, a fall in output and employment and a fall in the price level
C . a shift in the aggregate demand curve to the left, a fall in output and employment and a rise in the price level
D . a shift in the aggregate demand curve to the right, a rise in output and employment and a rise in the price level

Answer: B

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