If the government increases taxes, which of the following will occur in the short run?
a. An increase in GDP, an increase in the price level, an increase in money demand and an increase in the interest rate.
b. An increase in GDP, an increase in the price level, a decrease in money demand and an increase in the interest rate.
c. An increase in GDP, a decrease in the price level, an increase in money demand and an increase in the interest rate.
d. A decrease in GDP, a decrease in the price level, a decrease in money demand and a decrease in the interest rate.
e. A decrease in GDP, an increase in the price level, an increase in money demand and a decrease in the interest rate.
D
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Refer to Figure 15-6. The monopolist earns a profit of
A) $0. B) $170. C) $248. D) $372.
Inflation is generally the result of total spending growing faster than total production
Indicate whether the statement is true or false
In the classical model, what is the impact of changes in the demand for goods and services on aggregate output? Do they affect any real variables?
What will be an ideal response?
By definition, government purchases and taxes are zero for a closed economy
a. True b. False Indicate whether the statement is true or false