A simultaneous $10 million increase in both taxes and government spending will have no net effect on aggregate demand
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
An excludable good is a good that a producer can prevent people from consuming
Indicate whether the statement is true or false
The common feature of the Great Depression and the Global Economic Crisis is
A) that they were preceded by an asset price bubble. B) the active role of the Government before the crises. C) the active role of the FED before the crises. D) the immediate and the aggressive response by both government and the FED.
In a classical model
A. equilibrium real GDP is neither determined by aggregate supply nor by aggregate demand. B. equilibrium real GDP is determined by both aggregate supply and aggregate demand. C. equilibrium real GDP is determined by the government. D. equilibrium real GDP is supply determined.