Ignoring any supply-side effects, if government expenditure on goods and services increase by $10 billion and taxes increase by $10 billion, then real GDP ________ and the price level ________
A) increases; rises
B) increases; falls
C) decreases; rises
D) decreases; falls
E) does not change; does not change
A
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If the price of product X falls and this change increases the demand for product Y, then
A) X and Y are complements. B) X and Y are substitutes. C) X is an inferior good. D) Y is an inferior good.
How do changes in income tax policies affect aggregate demand?
A) Higher taxes increase corporate investment and aggregate demand. B) Higher taxes reduce disposable income, consumption, and aggregate demand. C) Higher taxes increase aggregate supply and thus increase aggregate demand as well. D) Higher taxes increase disposable income, consumption, and aggregate demand.
During the colonial period, individual producers
(a) were never required to produce specific goods or services. (b) were, at times, required by colonial officials to produce certain staples if they wanted to produce cash crops. For example, the early governors of Virginia directed tobacco producers to also plant wheat. (c) produced only what they were directed to produce by colonial officials as part of an overall plan of colonial development. (d) received orders directly from England to produce what was viewed as most valuable to England.
Which of the following is a characteristic of the monopolistic competition market structure?
a. Many firms and a homogeneous product. b. Few firms and differentiated products. c. Few firms and similar products. d. Few firms and a homogeneous product. e. Many firms and differentiated products.