Ignoring any supply-side effects, to close a recessionary gap of $100 billion with a government expenditure multiplier of 5, the government could
A) increase government expenditure on goods and services by $20 billion.
B) increase government expenditure on goods and services by $100 billion.
C) decrease government expenditure on goods and services by $20 billion.
D) raise taxes by $100 billion.
E) raise taxes by more than $20 billion.
Correct Answer:
Verified
Q114: If the federal government has a budget
Q115: Automatic stabilizers
A)have no effect on the magnitude
Q116: An economic expansion leads to--------------------needs-tested spending and--------------------
Q117: In 2010, the U.S. government had tax
Q118: The national debt is
A)the excess of this
Q120: An example of automatic fiscal policy is
A)a
Q121: An example of automatic fiscal policy is
A)expenditure
Q122: The supply-side effects show that a tax
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