Equal increases in government spending and taxes will:
a. lead to an increase in the equilibrium level of real GDP output that is larger than the initial change in government spending and taxes.
b. cancel each other out so that the equilibrium level of real GDP will remain unchanged.
c. lead to an equal increase in the equilibrium level of real GDP.
d. lead to an equal decrease in the equilibrium level of real GDP.
c
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In preparing their estimates of the stimulus package's effect on GDP, Obama administration economists estimated a government purchases multiplier of 1.57
Economist Robert Barro argues that ________, the government purchases multiplier would be lower than the administration's estimate, and economists Lawrence Christiano, Martin Eichenbaum, and Sergio Rebelo argued that ________, the multiplier would be higher than the administration's estimate. A) during wartime; when short-term interest rates are near zero B) during a recession; when the inflation rate is relatively low C) when the unemployment rate is high; when the value of the dollar is depreciating against foreign currencies D) when the federal budget is in surplus; when government transfer payments are declining
The short-run aggregate supply curve will shift to the left if:
a. there is a significant increase in worker productivity. b. workers on fixed-wage contracts expect higher inflation. c. the price of raw materials decreases. d. the price of capital goods rises. e. wages fall in anticipation of higher prices.
Recently, in Smalltown, the price of Twinkies fell from $0.80 to $0.70 . As a result, the quantity demanded of Ho-Ho's decreased from 120 to 100 . What would be the appropriate elasticity to compute? Using the midpoint method, compute this elasticity. What does your answer tell you?
Which of the following causes an increase in demand for a normal good?
A. decrease in income B. decrease in price C. increase in the price of a substitute D. increase in the price of a complement