There is an increase in government expenditures financed by taxes and its overall short-run effect on output is larger than the change in government spending.Which of the following is correct?
A) By themselves,both the change in output and the change in the interest rate increase desired investment.
B) By themselves,both the change in output and the change in the interest rate decrease desired investment.
C) By itself,the change in output increases desired investment spending and by itself the change in the interest rate decreases desired investment spending.
D) By itself,the change in output decreases desired investment spending and by itself the change in the interest rate increases desired investment spending.
Correct Answer:
Verified
Q41: If the government cuts the tax rate,
Q97: A tax cut shifts aggregate demand
A)by more
Q98: If a $1,000 increase in income leads
Q99: Permanent tax cuts shift the AD curve
A)farther
Q100: Initially,the economy is in long-run equilibrium.Aggregate demand
Q101: Most economists believe that a cut in
Q104: In 2009 President Obama and Congress increased
Q105: An decrease in taxes shifts aggregate demand
A)to
Q106: An increase in government spending on goods
Q196: A tax cut shifts the aggregate demand
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents