According to the classical model, desired saving is
A. affected by the money illusion at low income levels.
B. identical to the demand for saving at each level of real GDP.
C. equal to desired investment.
D. a function of real GDP.
Answer: C
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All else equal, an increase in government borrowing is likely to cause a(n):
A) leftward shift of the credit demand curve. B) rightward shift of the credit demand curve. C) downward movement along the credit demand curve. D) upward movement along the credit demand curve.
Which of these actions will occur to the budget constraint when an individual's income increases?
a. shifts outward b. shifts backward c. rotates clockwise d. cannot be determined from the information given
Most economists agree that the self-correcting mechanism works
a. very slowly. b. very rapidly. c. rapidly in the short run and slowly in the long run. d. slowly in the short run and rapidly in the long run.
An increase in tax rates as a result of a new tax law passed by Congress is an example of? ___________
A. increasing the government deficit B. increasing the government debt C. discretionary fiscal policy D. needs?tested taxing change.