In the traditional Keynesian model, if the government raises taxes, then
A. both consumption and real Gross Domestic Product (GDP) will increase.
B. both consumption and real Gross Domestic Product (GDP) will decrease.
C. consumption will increase but Gross Domestic Product (GDP) will decrease.
D. consumption will decrease but Gross Domestic Product (GDP) will increase.
Answer: B
You might also like to view...
The above figure shows a labor market with minimum wage equal to $16. In this figure, what area equals the deadweight loss?
A) area A B) area B C) area C D) area D E) area E
If a monopolist lowers its price and its demand is inelastic, then its
A) total revenue increases. B) total revenue decreases. C) total revenue does not change. D) total revenue is negative.
Twenty-four months after a 1 percentage point increase in the short-term (Treasury bill) interest rate, real GDP have fallen by about ________ in 1961-75, by ________ during 1976-1990, and by ________ during 1991-2007 period. 88-2004
A) 2%, 1%, 3% B) 0.1%, 2%, 1.8% C) 1.8%, 0.9%, 0.2% D) 0.2%, 0.1%, 0.9%
If P denotes the price of goods and services measured in terms of money, then
a. 1/P represents the value of money measured in terms of goods and services. b. P can be interpreted as the inflation rate. c. the supply of money influences the value of P, but the demand for money does not. d. All of the above are correct.