Which of the following is false?
A) The result of an expansionary fiscal policy in the short run would be an increase in the price level and an increase in RGDP.
B) Starting at a full-employment equilibrium, the only long-term effect of an increase in aggregate demand includes an increase in real output.
C) Starting at a full-employment equilibrium, once the economy has returned to its long run equilibrium after an increase in government purchases, employment will be equal to full employment.
D) When the government borrows money to finance a deficit, it increases the overall demand for money in the money market, driving interest rates up.
E) None of the above are false; all are true.
Correct Answer:
Verified
Q29: An increase in government purchases or a
Q30: A larger crowding-out effect:
A)increases the magnitude of
Q31: A smaller crowding-out effect:
A)increases the magnitude of
Q32: A decrease in government purchases or an
Q33: A larger crowding-out effect:
A)increases the magnitude of
Q35: A larger crowding-out effect:
A)increases the magnitude of
Q36: Which of the following is true?
A)When the
Q37: A smaller crowding-out effect:
A)increases the magnitude of
Q38: A smaller crowding-out effect:
A)increases the magnitude of
Q39: Due to crowding-out effects, other things being
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