Government decisions about the level of taxation and public spending are called:
A. fiscal policy.
B. monetary policy.
C. congressional policy.
D. legislative budgeting policy.
A. fiscal policy.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
What is "game theory"?
What will be an ideal response?
The difference between taxes and government spending is called: a. household saving. b. national saving
c. net tax. d. public saving.
Figure 36-7
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In Figure 36-7, there are three aggregate expenditure functions (C + I + G + X? IM) for an open economy. Which of the following would cause a movement from A to B?
A. a European economic expansion B. A decrease in the money supply C. An increase in the interest rate D. An increase in the U.S. price level