Keynes argued that during an economic downturn, the government should ________.
A. increase spending and increase taxes
B. increase spending and reduce taxes
C. decrease spending and reduce taxes
D. do nothing and wait for the economy to recover on its own
Answer: B
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A manufacturer of towels finds that his returns to scale are constant. Which of the following conclusions can be drawn?
a. The long-run total cost curve is horizontal. b. The long-run average cost curve is horizontal. c. The long-run total cost curve is downward sloping. d. The long-run average cost curve is downward sloping.
Pure monopoly
a. is defined as having only one supplier. b. has no close substitutes for its product. c. exists when entry and survival of potential competitors is extremely unlikely. d. All of the above are correct.
Money is a good store of value
A. when the average price level is rising. B. when the economy is experiencing severe inflation. C. when the average price level falling. D. when the unemployment rate is high.
If bank with $100 million in assets and $10 million in equity increases its assets by adding $1 to capital for every $1 added to assets:
A. the debt-to-equity ratio will remain constant. B. the debt-to-equity ratio will increase. C. the answer cannot be determined from the information in the question. D. the debt-to-equity ratio will decrease.