📊 Macroeconomics Theories and Policies 1
Q. In the long-run ISLM model, the long-run effect of a cut in government spending is to
  • (A) increase real output and the interest rate.
  • (B) increase real output and not affect the interest rate.
  • (C) not affect real output and increase the interest rate.
  • (D) not affect real output and reduce the interest rate.
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✅ Correct Answer: (D) not affect real output and reduce the interest rate.

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