Which of the following statements about fiscal policy is FALSE?
A) Real GDP can be increased above its long-run equilibrium only in the short run.
B) Real GDP is expanding over time in the long-run.
C) Government can shift the aggregate demand curve inward by decreasing spending.
D) Government can shift the aggregate demand curve outward by reducing spending.
Correct Answer:
Verified
Q24: Suppose the economy is at a short
Q25: If the government decreases government spending,then the
A)short-run
Q26: Suppose there is a contractionary gap and
Q27: If the government increases government spending,then the
A)short-run
Q28: If the government increases taxes,then the
A)short-run aggregate
Q30: Suppose the economy is in equilibrium on
Q31: According to traditional Keynesian analysis,fiscal policy operates
Q32: If the government decreases taxes,then the
A)short-run aggregate
Q33: Suppose the economy is at a short
Q34: Suppose there is a contractionary gap and
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