In the Stylized DSGE Model, the Motivation for a Rise

Multiple Choice

In the stylized DSGE model, the motivation for a rise in government expenditure ________ today is ________.

A) reducing consumption; permanent income hypothesis
B) raising wages; a rise in TFP
C) increasing labor demand; the Solow growth model
D) forcing workers to work; capacity utilization
E) increasing leisure; diminishing returns to consumption