1. How will decreasing government spending and open market sales help reduce inflation in an economy?

This will help increase interest rates and decrease shortage in aggregate demand and output in the economy.

This will help decrease aggregate demand and output in the economy and lower the price level.

This will help decrease interest rates and increase aggregate demand and output in the economy.

This will help decrease interest rates, decrease aggregate demand, and increase output in the economy.

This will help increase interest rates, increase aggregate demand, and decrease output in the economy.

2. Use the graph to answer the question that follows.

\fCapital goods K V R A P Consumer goods