Multiple Choice
There is an increase in government expenditures financed by taxes and its overall short-run effect on output is larger than the change in government spending.Which of the following is correct?
A) By themselves,both the change in output and the change in the interest rate increase desired investment.
B) By themselves,both the change in output and the change in the interest rate decrease desired investment.
C) By itself,the change in output increases desired investment spending and by itself the change in the interest rate decreases desired investment spending.
D) By itself,the change in output decreases desired investment spending and by itself the change in the interest rate increases desired investment spending.
Correct Answer:
Verified
Correct Answer:
Verified
Q26: In a certain economy, when income is
Q66: Most economists believe that fiscal policy<br>A)only affects
Q67: Scenario 34-2.The following facts apply to a
Q68: Initially,the economy is in long-run equilibrium.The aggregate
Q69: When taxes increase,the interest rate<br>A)increases,making the change
Q70: Which of the following effects results from
Q73: An increase in the MPC<br>A)increases the multiplier,so
Q74: If the MPC is 5/6 then the
Q75: Supply-side economists believe that changes in government
Q76: The government increases both its expenditures and