What is the short-run effect of increased deficit spending on an economy experiencing a recessionary gap?
A. Aggregate demand will increase, creating an inflationary gap.
B. Aggregate demand decreases, and the gap widens.
C. Aggregate supply increases, closing the gap.
D. Aggregate demand increases, and the gap closes.
Answer: D
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The natural rate of unemployment has increased in the United States and Europe over the last twenty years. What are things that could account for this?
What will be an ideal response?
Global budgets coupled with price ceilings can control total spending as long as
a. the price ceilings are negotiated in good faith. b. utilization of services does not increase significantly. c. providers cooperate by only providing "medically-necessary" services. d. patients are required to pay some of the expenses out-of-pocket. e. none of the above. Global budgets can never work to control spending.
Most industrial countries have adopted the regressive tax system
a. True b. False Indicate whether the statement is true or false
If the inflation rate is lower than expected, real income is redistributed from borrowers to lenders
a. True b. False