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
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Refer to Table 7.1. In this simple economy, M2 equals
A) $4,800. B) $6,400. C) $9,200. D) $16,800.
Rational production decisions require an understanding of
a. trade-offs. b. opportunity costs. c. scarcity of resources. d. All of the above are correct.
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.
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.