A decrease in wages payable during the accounting period represents a decrease in cash.

People ________ their labor supply in response to a temporary decrease in government purchases because

A) increase; current or future taxes will decrease, making them financially better off. B) decrease; current or future taxes will decrease, making them financially better off. C) decrease; current or future taxes will increase, making them financially worse off. D) increase; current or future taxes will increase, making them financially worse off.

Regarding fiscal policy, the new classical economists

a. are in favor of stability. b. attempt to avoid excessive and inflationary stimulus. c. want to avoid erratic government deficit spending. d. All of the above e. None of the above