According to the classical model, an increase in government purchases will
a. lead to a change in the interest rate that encourages consumers to spend more
b. lead to a change in the interest rate that encourages private businesses to invest more
c. discourage private spending by increasing the price level
d. be partially offset by a decline in consumption and investment spending
e. leave total spending and output unchanged
E
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Refer to Figure 13-1. Ceteris paribus, an increase in households' expectations of their future income would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
Explain how the development of telecommunications has made cities like Bangalore and Omaha important locations for the development of service trade?
Other things the same, what happens in the long run to the price level and quantity of output after a contraction in aggregate demand?
When there is a low degree of complementarity between two products, then their indifference curves will:
A. be relatively straight. B. be perfectly straight lines. C. bend sharply. D. be positively sloped.