Which of the following is an example of expansionary fiscal policy?
a. Decrease government spending.
b. Increase government spending.
c. Increase taxes and decrease government spending equally.
d. Increase taxes.
b
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If a firm hires labor for $20,000, pays rent of $12,000, buys raw materials for $6,000 from another firm, earns profits of $3,000, and sells its output for $41,000, the value added by the firm is _____
a. $0 b. $15,000 c. $35,000 d. $38,000 e. $41,000
A consumption tax would lead to an increase in the supply of loanable funds and a decrease in real interest rates
a. True b. False Indicate whether the statement is true or false
Household saving is the defined as consumption minus disposable income
a. True b. False
If it is the real rate of interest that savers and borrowers respond to, how does the Fed impact a real rate by targeting a nominal rate of interest?
What will be an ideal response?