Balanced budget multiplier (= +5 - 4 = 1. Thus the impact on economic equilibrium is exactly equal to the original change in government spending (and taxes). So we can say that ?Y = ?G.**)

What will be an ideal response?


the impact on equilibrium output of simultaneous increases of equal size in government spending and taxes

Economics

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Consider the labor market below.  If a minimum wage of $12 per hour is imposed in this labor market, then:

A. 400 workers will earn $12 an hour. B. total earnings will rise C. worker surplus will fall. D. 200 workers will lose their jobs.

Economics

If the price in an oligopoly market is the same as that of a monopoly with identical cost and demand conditions then:

A. the average cost curve must be downward sloping. B. there may be collusion between firms. C. market demand must be unit elastic. D. This could never happen.

Economics

Market supply is found by

A) horizontally summing each individual producer's average total cost curve. B) vertically summing the relevant part of each individual producer's marginal cost curve. C) horizontally summing the relevant part of each individual producer's marginal cost curve. D) vertically summing each individual producer's average total cost curve.

Economics

If economists forecast an increase in aggregate expenditure, which of the following is likely to occur?

A) GDP will fall. B) Wages will fall. C) Inventories will rise. D) GDP will rise.

Economics