There are 3 cases involved here. But real GDP will be the same because of that aggregate supply is vertical. Combined government spending cuts and tax increases. Financing of deficits, and disposing of surpluses. Borrowing versus new money.
Government can finance a deficit by two ways.
For example, decreases in private spending reduce the expansionary impact of the deficit spending. That is this spending will increase without reducing consumption or investment. This kind of financing is a more expansionary way but more inflationary. This means that the government buys back some of its bonds, and this will to interest rate decrease and private borrowing and spending will increase. Therefore, the increase in private spending offsets the contractionary fiscal policy.