Multiple Choice
Within the framework of the Keynesian model, which of the following would most likely occur if the federal government increased its spending and enlarged the size of the budget deficit during a period of full employment?
A) The rate of inflation would decline.
B) The rate of inflation would rise.
C) A recession would develop.
D) Interest rates would fall.
Correct Answer:
Verified
Correct Answer:
Verified
Q12: During normal times, if the marginal propensity
Q13: Which of the following best illustrates the
Q14: A major advantage of built-in or automatic
Q15: Long lags make discretionary policy less effective
Q16: When an economy dips into recession, automatic
Q18: If policy makers believe that an inflationary
Q19: As the marginal propensity to consume (MPC)
Q20: Figure 11-4 <img src="https://d2lvgg3v3hfg70.cloudfront.net/TBX9063/.jpg" alt="Figure 11-4
Q21: If the government increases its spending, which
Q22: If Congress votes to increase government purchases