If the government increases spending and there is a complete direct expenditure offset, then
A) aggregate demand and real Gross Domestic Product (GDP) will not change.
B) aggregate demand and real Gross Domestic Product (GDP) will increase by the amount of the spending increase.
C) the price level will drop.
D) the government spending multiplier will be greater than zero.
A
You might also like to view...
The profit maximizing markup (over MC) is given by
A. elasticity + 1. B. elasticity2. C. elasticity. D. 1/elasticity.
Between 1836 and 1851 travel time between New York and Chicago was cut from
A. a month to two days. B. a month to a week. C. two weeks to one week. D. two weeks to two days.
The Benefits Principle
What will be an ideal response?
In utilizing unconventional monetary policy in 2010, the Federal Reserve purchased
A. real estate worth more than $2 trillion. B. $800 billion in Treasury bills. C. over $1 trillion in mortgage backed securities. D. $600 billion in long-term Treasury bonds.