When the expenditure level is above the full employment level of GDP, a possible consequence is
a. falling prices.
b. rising prices.
c. falling disposable income.
d. high levels of unemployment.
b
Economics
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Explain why current consumption might change even if current income does not change
What will be an ideal response?
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The multiplier effect
a. and the crowding-out effect both amplify the effects of an increase in government expenditures. b. and the crowding-out effect both diminish the effects of an increase in government expenditures. c. diminishes the effects of an increase in government expenditures, while the crowding-out effect amplifies the effects. d. amplifies the effects of an increase in government expenditures, while the crowding-out effect diminishes the effects.
Economics