Multiple Choice
Suppose there is a Fed purchase of bonds and simultaneous tax cut.We know with certainty that this combination of policies must cause
A) an increase in the interest rate (i) .
B) a reduction in i.
C) an increase in output (Y) .
D) a reduction in Y.
Correct Answer:

Verified
Correct Answer:
Verified
Q28: A fiscal expansion (e.g.a tax cut)will result
Q29: The IS curve represents<br>A)the single level of
Q30: We know with certainty that a tax
Q31: Use the IS-LM model to answer this
Q32: First,define the LM curve.Second,explain why it has
Q34: If government spending and taxes increase by
Q35: For this question,assume that investment spending depends
Q36: Increases in the budget deficit are believed
Q37: Under the reasonable dynamic assumptions discussed in
Q38: Assume that investment does not depend on