At a given output level, a temporary reduction in government purchases will
A) increase desired saving, causing the IS curve to shift down and to the left.
B) increase desired saving, causing the IS curve to shift up and to the right.
C) decrease desired saving, causing the IS curve to shift down and to the left.
D) decrease desired saving, causing the IS curve to shift up and to the right.
A
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Which of the following statements is true?
A) An optimizing individual is also likely to exhibit rationality. B) Optimization requires individuals to foresee the future perfectly. C) The less information that is available, the easier it is to make optimal decisions. D) An optimizing individual need not consider the risks involved in various choices.
An example of fiscal policy is
A) a reduction in government spending. B) an increase in autonomous spending by consumers. C) a reduction in investment spending by the private sector. D) an increase in Social Security spending by the elderly.