Suppose fiscal policy makers implement a policy to reduce the size of a budget deficit. Based on the IS-LM model, we know with certainty that the following will occur as a result of this fiscal policy action
A) Investment spending will decrease.
B) Investment spending will increase.
C) There will be no change in investment spending.
D) Investment spending may increase, decrease, or not change.
E) none of the above
D
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Suppose Bill Gates deposits $20 million into his checking account at Wells Fargo Bank. If the required reserve ratio is 10 percent, what is the maximum change in money supply?
A) -$200 million B) -$180 million C) $2 million D) $180 million E) $200 million
Which of the following events would cause both the equilibrium price and equilibrium quantity of number two grade potatoes to increase if number two grade potatoes are an inferior good?
a. an increase in consumer income b. a decrease in consumer income c. greater government restrictions on agricultural chemicals d. fewer government restrictions on agricultural chemicals