Question

Which of the following would occur if Congress voted to decrease spending?

Output would increase.
Price level would increase.
Employment would increase.
Real interest rates would increase
. Nominal interest rates would decrease.

Answer 1

The answer is : Price Level would increase

If the Congress voted to decrease spending, the Gross Domestic Product in that country would decrease,

IF GDP increase, the output will decrease which will eventually lead to increase in unemployment and an increase to price level ( the less the products, the higher the price would be)