To compensate for the possibility of indirect crowding out, a government engaging in expansionary policy aimed at eliminating a recessionary gap could
A) reduce taxes rather than increase government spending.
B) increase spending less than the simplest Keynesian model would predict.
C) both reduce taxes and reduce spending to be able to achieve full employment.
D) increase spending more than the simplest Keynesian model would predict.
D
You might also like to view...
Refer to Figure 23-1. If the economy is at point L, what will happen?
A) Inventories have risen above their desired level, and firms decrease production. B) Inventories have risen above their desired level, and firms increase production. C) Inventories have fallen below their desired level, and firms increase production. D) Inventories have fallen below their desired level, and firms decrease production.
Tax loopholes increase the progressivity of the federal income tax
a. True b. False Indicate whether the statement is true or false