In the long run, a higher government deficit does not affect equilibrium real Gross Domestic Product (GDP), so that continuous increases in the government deficit will
A) lead to greater tax revenues.
B) reduce spending on privately provided goods and services.
C) reduce the price level.
D) increase the unemployment rate.
B
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The main purpose of most tariffs and quotas is to
A) reduce the foreign competition that domestic firms face. B) improve the quality of goods and services imported into the country. C) raise revenue for the government. D) reduce the prices consumers pay for goods and services.
What is the distinction between a movement along the consumption function and a shift of the consumption function?
a. A movement along the consumption function is caused by a change in income and a shift of the consumption function is caused by a nonincome determinant. b. A movement along the consumption function is caused by a change in interest rates and a shift of the consumption function is caused by an income determinant. c. A movement along the consumption function is caused by a change in net wealth and a shift of the consumption function is caused by an income determinant. d. There is not distinction between the two, they are the same movement.