The government spending multiplier is the number that, when multiplied by the
A) budget deficit, gives us the change in total spending.
B) budget deficit, gives us the change in the public debt.
C) change in taxes, gives us the change in total spending.
D) change in government spending, gives us the change in total spending.
D
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The number of hours that a worker is willing to work is determined by the trade-off between the increasing
A. Total utility of leisure and the decreasing total utility of income. B. Value of leisure time and the decreasing marginal utility of income. C. Marginal utility of both income and leisure. D. Total utility of income and the decreasing marginal utility of leisure.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher