If there is an increase in government spending, then, ceteris paribus, the IS curve:
A) will shift to the left.
B) will shift to the right.
C) will not shift at all.
D) will shift to the left if there is a corresponding decrease in taxes.
Ans: B) will shift to the right.
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Marginal social cost includes both the marginal private cost and the marginal external cost that production imposes on society
a. True b. False
A tax that creates an excess burden may nevertheless improve efficiency if
a. consumption of the good has been generating beneficial externalities. b. consumption of the good has been generating no externalities. c. consumption of the good has been generating detrimental externalities. d. the good has been supplied by a monopolist.
Which of the following is an exogenous variable in the Three-Sector-Model?
a. Oil prices b. GDP price index c. Real risk-free interest rate d. Quantity of currency per time period e. Real GDP
Assume that in the economy real Gross Domestic Product (GDP) grows at a constant rate. There has just been a decrease in the rate of growth of the population. This implies that the
A. rate of growth of per capita real GDP will decrease. B. rate of growth of capital accumulation will decrease. C. rate of growth of capital accumulation will increase. D. rate of growth of per capita real GDP will increase.