When government revenue is less than government spending, the nation has a:

A rightward shift of the demand curve will lead to a(n)

A) increase in equilibrium price. B) excess demand at the old equilibrium price. C) increase in quantity supplied. D) All of the above.

Assume the economy is in short-run equilibrium at a real GDP below its potential real GDP. According to Keynesian theory, which of the following policies should be followed?

a. The Federal Reserve should increase the money supply b. The federal government should increase spending. c. The federal government should do nothing because the economy will self correct to potential real GDP. d. All of the above.