Which of the following statements, ceteris paribus, accurately describes the impact of government spending on aggregate demand?
a. A decrease in government spending will decrease aggregate demand.
b. Aggregate demand rises with falling government spending.
c. Aggregate demand falls with stable government spending.
d. A decrease in government spending will stabilize aggregate demand.
a. A decrease in government spending will decrease aggregate demand.
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Refer to the figure above. The net exports of the country is zero:
A) for real exchange rates below R*. B) at the real exchange rate of R*. C) for all real exchange rates. D) for real exchange rates above R*.
How does the national debt as a percentage of GDP in the United States compared to the United Kingdom?
a. U.S. national debt ratio is smaller. b. U.S. national debt ratio is slightly larger. c. U.S. national debt ratio is substantially larger. d. U.S. national debt ratio is substantially smaller.