Higher full-employment deficits
A) shift the IS curve to the right, raise real interest rates, and reduce consumption spending.
B) shift the IS curve to the right, raise real interest rates, and reduce investment spending.
C) shift the IS curve to the left, lower interest rates, and increase investment spending.
D) shift the IS curve to the left, lower interest rates, and increase consumption spending.
Correct Answer:
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Q55: Each of the following is a potential
Q56: In the short-run, a government budget deficit
Q57: In the short-run, the effect on real
Q58: In the short-run, a government budget surplus
Q59: In the short-run, the effect on real
Q60: An increase in the government's budget deficit
A)
Q61: A decrease in the government's budget deficit
A)
Q62: Higher full-employment deficits
A) reduce total savings, raise
Q63: Lower full-employment deficits
A) reduce total savings, raise
Q65: Lower full-employment deficits
A) shift the IS curve
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