
Which of the following statements is false?
A) An increase in government spending raises the equilibrium level of income by a multiple of the original spending increase.
B) Government spending is part of fiscal policy.
C) A decline in government spending has a contractionary effect on the economy.
D) Increasing government spending is a means to close a recessionary gap.
E) An increase in government spending shifts the aggregate demand curve downward by a fraction of the rise in government spending.
Correct Answer:
Verified
Q15: Government spending equals the sum of these
Q16: If the government wants to close a
Q17: To close a GDP gap, government should
A)
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A) potential
Q21: When taxes go down, then output increases,
Q22: Once Congress receives the president's budget, the
Q23: The fiscal year for the U.S. government
Q24: When federal expenditures grow faster than tax
Q25: Expansionary fiscal policy can crowd out private-sector
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