According to the circular flow model, all else constant, an increase in government spending should cause an increase in spending, income, and production in the economy
Indicate whether the statement is true or false
TRUE
You might also like to view...
Which of the following is one of the reasons to believe that institutional change is more likely now than in the past?
a. The colonial era is over and countries are in the position to make their own institutional choices. b. The collapse of communism has expanded the opportunity for institutional change. c. Reductions in transportation and communication costs have increased the importance of institutions and policies. d. All of the above are true.
Budget deficits lead to ______ interest rates and ______ amounts of saving and investment.
a. lower; smaller b. lower; larger c. higher; smaller d. higher; larger
The impact on world well-being of an export subsidy and a countervailing duty (of the same size as the subsidy) is
A. negative due to overproduction. B. negative due to under-consumption. C. negative due to deadweight loss. D. zero.
In the above figure, the opportunity cost of moving from point D to point C is
A. 55 guitars. B. 25 ukuleles. C. 20 guitars. D. 50 ukuleles.