When real Gross Domestic Product (GDP) rises, which of the following will automatically occur?
A. an increase in unemployment compensation expenditures
B. an increase in income tax revenues
C. a dcrease in government expenditures
D. an increase in income tax rates
Answer: B
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Assuming all else equal, if the Fed is expected to adopt a contractionary monetary policy, ________
A) labor demand will increase B) inflation expectations will increase C) the long-run real interest rate will increase D) labor supply will increase
________ creates an informational equilibrium in which people trust the wisdom of others and ignore their own information
A) Anchoring B) Hedging C) Sniping D) Herding
A decline in the money stock will
a. shift the LM schedule to the right. b. shift the LM schedule to the left. c. not have any effect on the LM schedule. d. shift the IS schedule downward and to the right.
If aggregate demand shifts outward over a long period of time, with aggregate supply held constant, the economy should experience
a. unemployment. b. recession. c. budget surpluses. d. inflation.