Solved

Suppose Government Purchases Have Decreased and the Economy Has Reached

Question 35

Multiple Choice

Suppose government purchases have decreased and the economy has reached a new long-run equilibrium. Which of the following best describes the new equilibrium?


A) Nothing has changed because real GDP is again equal to potential GDP.
B) Consumers are better off because taxes are lower.
C) The economy is growing more rapidly because investment is higher.
D) The economy is better off because consumption is higher.
E) The economy is growing more slowly because consumption is higher.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents