If President Obama wanted to decrease aggregate demand, which of the following would he tend to favor?
A. An increase in government spending, because it will increase the size of the public sector.
B. A decrease in government spending, because it keeps the public sector small.
C. An increase in transfer payments, because it has a larger multiplier than tax changes.
D. An increase in taxes, because it would not make the public sector smaller.
Answer: B
You might also like to view...
Which of the following reflects the concept of required reserves?
A. The money multiplier is greater than 1. B. Required reserves are equal to total reserves. C. Excess reserves are equal to 0. D. Banks can lend only their required reserves.
Which of the following leads to a lower level of unemployment in the long run?
a. both an increase in the size of the money supply and an increase in the money supply growth rate b. an increase in the size of the money supply but not an increase in the money supply growth rate c. an increase in the money supply growth rate, but not an increase in the size of the money supply d. neither an increase in the size of the money supply nor an increase in the money supply growth rate
A person who voluntarily quits his/her job in New York and expects to get a similar job in Los Angeles is an example of:
A. structural unemployment. B. cyclical unemployment. C. durational unemployment. D. frictional unemployment.
If net capital flow were zero for a country, then exports would not equal imports
Indicate whether the statement is true or false