The balanced budget multiplier says that
A. An increase in government spending paid for by a tax increase of equal size has no effect on aggregate demand.
B. An increase in government spending must be paid for by a tax cut of equal size.
C. An increase in government spending paid for by a tax increase of equal size shifts aggregate demand leftward.
D. An increase in government spending paid for by a tax increase of equal size shifts aggregate demand rightward.
Answer: D
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A snack shop inside a hotel in a busy city has a monopoly on food sales if it is the only food vendor in the hotel that is open 24 hours a day
Indicate whether the statement is true or false
The main reason why the traditional classical school ceased to be widely accepted was that: a. it did not reflect the realities of the modern economy. b. when Keynes received the Nobel Prize, the academic establishment started believinghis ideas
c. it could not explain the persistence of the high levels of unemployment seen during the Great Depression. d. it was too abstract to be completely understood. e. it could not explain the relationship between inflation and unemployment.