An increase in government spending without an accompanying increase in taxes
A) does not increase aggregate demand.
B) would effectively eliminate an inflationary gap.
C) causes investment spending to increase.
D) requires additional government borrowing.
D
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Refer to Table 16-4. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if Congress and the president do not use fiscal policy
If Congress and the president use fiscal policy successfully to keep real GDP at its potential level in 2017, which of the following will be lower than if Congress and the president had taken no action? A) real GDP and potential GDP B) potential GDP and the inflation rate C) real GDP and the inflation rate D) real GDP and the unemployment rate
Fiscal policy is concerned with _____
a. government spending and taxation b. government spending and changes in money supply c. money supply and taxation d. government spending, taxation, and money supply e. only money supply