Ignoring any supply-side effects, if government expenditure on goods and services increase by $10 billion and taxes increase by $10 billion, then real GDP --------------------and the price level-------------------- .
A) decreases; rises
B) increases; rises
C) decreases; falls
D) does not change; does not change
E) increases; falls
Correct Answer:
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Q123: Q124: Need-based spending -------------------- during an expansion and-------------------- Q125: Taxes that change with the level of Q126: A $100 million decrease in government expenditure Q127: If a tax cut increases people's labor Q128: When an economy faces an inflationary gap, Q129: If we look at the federal government Q130: If the nominal interest rate is 10 Q132: The crowding out effect refers to the--------------------from--------------------in Q133: Suppose the economy is in an equilibrium
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