According to the simple macroeconomic model presented in Chapter 3, which of the following will not be caused by an increase in government spending?
A. an increase in interest rate
B. a decrease in consumption
C. a decrease in investment
D. an increase in government debt
Ans: B. a decrease in consumption
You might also like to view...
Behavioral assumptions
a. make economic models more complex than if these assumptions were removed b. pertain only to consumers c. hold all other things constant d. are ways to test a hypothesis e. describe how individuals are expected to behave
In the long run, the natural rate of unemployment depends primarily on the growth rate of the money supply
a. True b. False Indicate whether the statement is true or false
If the cross-price elasticity is positive, we can conclude that the two goods are ______ because the price of one good and the demand for the other move in the same direction.
a. complements b. substitutes c. counterparts d. identical
In Figure 24.1 total cost is represented by the area
A. CDFE. B. ABFE. C. ABGHE. D. ABDC.