According to the Keynesian model, the government can increase spending or cut taxes to close a recessionary gap
a. True
b. False
Indicate whether the statement is true or false
True
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Fiscal policy is policy aimed at controlling undesired fluctuations in overall spending through changes in
A) government expenditures and taxes. B) government subsidies to marginal business firms. C) interest rates. D) methods of making seasonal adjustments. E) price and wage regulation.
Refer to Figure 3-1. A decrease in the price of a substitute good would be represented by a movement from
A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.
Which of the following is not a cause of market failure?
A) Incomplete information B) Externalities C) Individuals acting according to their own self-interest D) Public goods
If goods A and B are complements, and if the price of good B rises, how will this affect the market equilibrium for good A?
a. Price will fall and quantity will rise. b. Price will rise and quantity will fall. c. Price and quantity will both fall. d. Price and quantity will both rise.