Suppose that government purchases of goods and services increase by $200 and at the same time lump-sum taxes increase by $200.Which of the following is true in this case?
A) Whether the budget deficit will increase or decrease will depend on the value of the marginal propensity to consume.
B) The budget deficit will increase by $200.
C) The budget deficit will increase by $400.
D) The budget deficit will decrease as the economy expands.
E) There will be no change in the budget deficit.
Correct Answer:
Verified
Q27: A(n)_ provides guaranteed benefits for those who
Q28: If the government increased defense spending by
Q29: A possible budget reform involves:
A)a quadrennial budget.
B)breaking
Q30: Which of the following would decrease the
Q31: Which of the following is not a
Q33: Problems with the federal government budget process
Q34: If government increased Social Security benefits and
Q35: The problem with a detailed federal government
Q36: A biennial budget:
A)is more useful than an
Q37: Which of the following is true of
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