In the Keynesian model in the short run, what is likely to happen to employment after each of the following shocks?(a)An increase in taxes(b)An increase in consumer spending generated by a reduced desire for saving(c)An increase in the money supply
What will be an ideal response?
| (a) | The increase in taxes shifts the IS curve to the left, reducing output in the short run and thus |
| (b) | The increase in consumer spending shifts the IS curve to the right, increasing output in the short |
| (c) | The increase in the money supply shifts the LM curve to the right, increasing output in the short |
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A) 97.3 B) 102.8 C) 128.0 D) Zero, since the price of CDs fell and the price of gasoline increased
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a. True b. False Indicate whether the statement is true or false
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a. true b. false