An increase in government purchases must always be accompanied by an increase in autonomous net taxes to boost aggregate demand.

Name: An increase in government purchases must always be accompanied by an increase in autonomous net taxes to boost aggregate demand.
Brand: Quizplus
Rating: 4.8 (42 reviews)

Question

Quizplus · Accepted Answer

An increase in government purchases can be accompanied by a decrease in autonomous net taxes or no change in autonomous net taxes. The key is that the overall effect on aggregate demand must be positive.

An Increase in Government Purchases Must Always Be Accompanied by an Increase