If the government increases spending but does not raise taxes

A) aggregate demand will increase without any effect on the price level.
B) borrowing by the government will take place.
C) the government will have to sell some assets, such as oil and national parks.
D) the government will have to either lower expenditures or raise taxes the next year.


B

Economics

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Suppose the Fed increases the money supply. As a result of this, people go out and spend more money on consumer goods, increasing aggregate spending. This is known as a(n)

A) indirect effect of monetary policy. B) direct effect of monetary policy. C) indirect effect of fiscal policy. D) direct effect of fiscal policy.

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