According to non-Keynesians, how will an increase in government spending financed by borrowing during a recession affect recovery?

a. Higher future taxes and interest rates will be required to finance the larger debt and this will weaken the recovery.
b. Repayment of the debt can always be shifted to the future, making it possible to keep tax rates low and thereby strengthen the recovery.
c. Higher interest payments will increase future government spending, and thereby promote a stronger the recovery.
d. The increase in government spending will exert a multiplier effect on the economy, leading to a stronger recovery.


A

Economics

You might also like to view...

What crucial role do financial intermediaries perform in an economy?

What will be an ideal response?

Economics

Suppose Quarto takes 10 years to double the size of its economy. According to the rule of 70, its growth rate is _____

a. 15 percent b. 10 percent c. 7 percent d. 20 percent

Economics

The relative importance of various asset items on a commercial bank's balance sheet reflects a bank's pursuit of which two conflicting goals?

A. Profits and risk B. Liquidity and profits C. Assets and liabilities D. Buying and selling government securities

Economics

"static" view of income differences

A) considers incomes across different groups by tracking them over time B) considers incomes across different groups by creating a base year for comparison C) considers income across different groups at a given point in time D) averages all incomes into a single measure of differences

Economics