Assume that the RBA is expected to respond to any event by keeping output constant (i.e., equal to its initial level). An unexpected increase in government spending will cause:
A) stock prices to fall.
B) stock prices to rise.
C) no change in stock prices.
D) an ambiguous effect on stock prices.
E) stock prices to fall only if goods prices fall.

Question

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The Answer of Assume that the RBA is expected to respond to any event by keeping output constant (i.e., equal to its initial level). An unexpected increase in government spending will cause:
A) stock prices to fall.
B) stock prices to rise.
C) no change in stock prices.
D) an ambiguous effect on stock prices.
E) stock prices to fall only if goods prices fall.

Assume That the RBA Is Expected to Respond to Any