According to Keynesian theory, decreasing taxes and increasing government spending will most likely change consumption expenditures and unemployment in which of the following ways?
A) Decrease/Increase
B) Decrease/No change
C) Increase/Decrease
D) Increase/Increase
E) No change/Decrease
Ans: C) Increase/Decrease
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The U.S. economy is relatively open in terms of economic activity related to international trade.
Answer the following statement true (T) or false (F)
Refer to Figure 9.3. If the government establishes a price ceiling of $1.00, total consumer and producer surplus will be
A) $1.50. B) $300. C) $450. D) $500. E) $600.
When real GDP is in equilibrium with no government and no international trade
A) real planned investment spending equals real planned saving. B) real planned investment equals real planned consumption spending. C) unplanned inventories are increasing. D) unplanned inventories are decreasing.
Most loopholes in the income tax system
a. are more likely to be exploited by the wealthy. b. make it more progressive. c. were created by the tax reforms instituted in 1986. d. do not affect the economic decisions of the people who benefit from them.