If the U.S. government increased its spending by $100 billion and increased taxes by $100 billion, the net effect on Aggregate Demand would be:

a. Neutral (i.e., no change in aggregate demand).
b. To increase aggregate demand.
c. To decrease aggregate demand.
d. To increase aggregate supply.
e. To decrease aggregate supply.

.B

Economics

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An increase in the demand for labor will ________ wages and ________ employment

A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease

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Which of the following affects the magnitude of the multiplier?

i. marginal propensity to consume ii. marginal propensity to invest iii. marginal tax rate A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii

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