In the long run, a higher government budget deficit causes

A) a decrease in both private spending and equilibrium real GDP.
B) an increase in both private spending and equilibrium real GDP.
C) a decrease in private spending while equilibrium real GDP remains unchanged.
D) no change in private spending but a decrease in equilibrium real GDP.


C

Economics

You might also like to view...

Refer to Table 7.1. In this simple economy, M2 equals

A) $4,800. B) $6,400. C) $9,200. D) $16,800.

Economics

Rational production decisions require an understanding of

a. trade-offs. b. opportunity costs. c. scarcity of resources. d. All of the above are correct.

Economics

The process of steady increase in the quantity and quality of goods and services the economy can produce is called:

A. aggregation. B. production. C. globalization. D. economic growth.

Economics

If a firm is NOT forced to pay for external costs, it will

A) continue to overproduce the good. B) continue to under produce the good. C) request a subsidy from the government. D) raise prices.

Economics