In the medium run,a tax increase that causes a reduction in the budget deficit will
A) affect only the price level.
B) not affect the price level but will alter the composition of output.
C) not affect the level of output, but will affect the composition of output.
D) affect both the level and composition of output.
Correct Answer:
Verified
Q2: The official measure of the deficit becomes
Q3: If the government runs a primary deficit
Q4: In the medium run,a tax cut that
Q5: The government budget constraint tells us that
Q6: The debt ratio will increase by more
Q7: When the economy is in a liquidity
Q8: The primary deficit is
A)government spending minus interest
Q9: In the short run,an increase in government
Q10: If the government runs a primary deficit
Q11: The official measure of the deficit
A)always underestimates
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