When comparing a $100 billion increase in government expenditure to a $100 billion decrease in tax revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease.
B) equal to the effect of the tax decrease.
C) less than the effect of the tax decrease.
D) positive whereas the effect of the tax decrease is negative.
E) negative whereas the effect of the tax decrease is positive.
A
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When auto workers go on strike at many of the "Big 3" plants around the United States, the supply of American automobiles
A) increases, which is represented by a leftward shift in the supply curve. B) increases, which is represented by a rightward shift in the supply curve. C) decreases, which is represented by a rightward shift in the supply curve. D) decreases, which is represented by a leftward shift in the supply curve. E) remains the same; only quantity supplied changes.
The hypothesis that people believe the best indicator of the future is the recent past is known as:
a. rational expectations. b. adaptive expectations. c. lagged expectations. d. trend expectations.