Multiple Choice
To close a recessionary gap using fiscal policy, the government can:
A) increase government spending by the size of the gap.
B) decrease government spending by the size of the gap.
C) increase government spending by more than the size of the gap.
D) increase government spending by less than the size of the gap.
Correct Answer:

Verified
Correct Answer:
Verified
Q86: At the equilibrium level of real GDP,
Q87: If consumption expenditures are $200 billion, total
Q88: Using the aggregate expenditure-output model, assume the
Q89: If the marginal propensity to consume (MPC)
Q90: On the graph of GDP, government spending
Q92: In the aggregate expenditures model, if aggregate
Q93: Suppose equilibrium real GDP is currently at
Q94: If the spending multiplier is equal to
Q95: When the spending of consumers, businesses, government,
Q96: If the marginal propensity to consume (MPC)