If the Federal Reserve tightens monetary policy so that real interest rates increase and real GDP decreases,
A) tax revenues will decrease, decreasing the government's cash deficit, and increasing the full-employment deficit.
B) tax revenues will increase, decreasing the government's cash deficit, and decreasing the full-employment deficit.
C) tax revenues will decrease, increasing the government's cash deficit, but not changing the full- employment budget balance.
D) tax revenues will increase, decreasing the government's cash deficit, but not changing the full-employment budget balance.
Correct Answer:
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Q20: An increase in government purchases
A) shifts the
Q21: A change in government tax policy that
Q22: The right measure of fiscal policy is
A)
Q23: An increase in the full-employment deficit
A) shifts
Q24: An increase in the full-employment deficit
A) shifts
Q26: To turn the cash budget into the
Q27: When real GDP decreases and unemployment increases
A)
Q28: When real GDP increases and unemployment decreases
A)
Q29: Each of the following are further adjustments
Q30: The real interest that government pays on
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