The model predicts that a temporary decrease in government purchases causes:
A) an increase in consumption.
B) a reduction in real GDP.
C) an increase in gross investment.
D) all of the above.
Correct Answer:
Verified
Q48: How does government without borrowing affect the
Q49: What are the effects of a permanent
Q51: According to the market clearing model, a
Q52: A temporary decrease in government purchases does
Q53: The model predicts that a temporary decrease
Q54: According to the market clearing model, a
Q55: A temporary increase in government purchases does
Q56: The model predicts a permanent decrease in
Q57: With a permanent change in government purchases
Q58: The model predicts a permanent decrease in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents