An increase in government spending without any increase in taxes

A. does not increase aggregate demand.
B. causes investment spending to increase.
C. requires additional government borrowing.
D. would effectively eliminate an inflationary gap.


Answer: C

Economics

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If people choose to hold some of a newly received loan as cash instead of keeping it in a checking account, _____

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Legally, a patent grants a firm an exclusive right to its innovation for a period of

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According to the interest-rate effect, aggregate demand slopes downward (negatively) because

A. lower prices increase money holdings, decrease lending, interest rates rise, and investment spending falls. B. lower prices increase the value of money holdings and consumer spending increases. C. lower prices decrease the value of money holdings and consumer spending decreases. D. lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases.

Economics