An increase in the budget deficit can be reflected in
A) an increase in private saving.
B) a reduction in investment.
C) a reduction in net exports.
D) all of the above
E) none of the above
D
You might also like to view...
An above-full-employment equilibrium occurs when
A) aggregate demand decreases while neither the short-run nor long-run aggregate supply changes. B) short-run aggregate supply decreases while neither aggregate demand nor long-run aggregate supply changes. C) the equilibrium level of real GDP is greater than potential GDP. D) the equilibrium level of real GDP is less than potential GDP.
If interest rates fall without any corresponding change in income, then it is possible according to the IS-LM model that
a. money demand fell and government spending declined. b. the money supply increased and taxes declined. c. tight monetary policy and easy fiscal policy. d. easy monetary policy and easy fiscal policy.