According to David Ricardo, an increase in government spending without any tax increase will not increase aggregate demand because
A) consumers will increase their consumption proportionately more than Keynesian economists believe they will.
B) consumers will save less than they otherwise would have.
C) consumers will consume less and save more to prepare for increased taxes in the future.
D) the private sector is more likely than the public sector to spend any extra income on national defense.
C
You might also like to view...
________ in the foreign interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to depreciate, everything else held constant
A) An increase; right B) An increase; left C) A decrease; right D) A decrease; left
General Motors estimates that U.S. demand for its newest product will be: Qus = 30,000 - 0.5P. Export demand will be Qex = 25,000 - 0.5P. The total market demand curve for this product will be a
A) straight line with a slope of -0.5. B) straight line with a slope of -1.0. C) kinked line with the kink at Q = 25,000. D) kinked line with the kink at P = 50,000. E) none of the above
Which of the following is true of the business cycle record of the United States?
a. Recessions have been lengthier during the last two decades than was true prior to 1980. b. Real GDP contracted throughout most of the 1950s. c. Real GDP in 2000 was approximately the same as 1950. d. Since 1950, the fluctuations in GDP have been less severe than before 1950.
The supply of labor generally is considered to be downward-sloping because the opportunity cost of leisure decreases as wages increase.
Answer the following statement true (T) or false (F)