Keynesian economists argue that during a recession
a. private sector spending will rise and therefore government spending should be reduced in order to help maintain aggregate demand at or near the full employment level.
b. private sector spending will decline, and therefore government spending should increase in order to help maintain a high level of aggregate demand.
c. private sector spending will decline, and therefore government spending should be reduced in order to avoid the crowding out of still more private sector spending.
d. private sector spending will rise and therefore government spending should be increased in order to provide more stimulus for the economy.
B
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Refer to Scenario 12.1. Suppose that a third friend, Ryan, joins Simon and Paula on their way home from school, and this reduces the probability of any particular individual from stepping forward to help the man being attacked from 70% to 60%
What is the probability of either Simon, Paula, Ryan, or any combination of the three trying to rescue the man? A) 21.6% B) 50.4% C) 72.0% D) 93.6%
Households will choose to save more if
A) income is expected to decrease in the future. B) current disposable income increases. C) Both answers A and B are correct. D) Neither answer A nor B is correct.
The lower the discount rate, the higher the present value of a proposed project
a. True b. False
The price elasticity of demand for a rental home in Luxury Resorts in the summer is 1.40 and is 2.60 in the spring. If Luxury Resorts faces a constant marginal cost of $600 per home rental, what is the profit-maximizing off-peak load price to charge in the spring?
A) $975 B) $2,100 C) $575 D) $850