According to Keynes,the policy of incurring budget surpluses will cause the equilibrium price level to __________ and equilibrium output to __________.
A)rise; rise
B)rise; fall
C)fall; rise
D)fall; fall
E)remain the same; remain the same

Question

Quizplus · Accepted Answer

According to Keynesian economics, incurring budget surpluses typically involves reducing government spending or increasing taxes, which decreases aggregate demand. This leads to a decrease in both the equilibrium price level and equilibrium output.

According to Keynes,the Policy of Incurring Budget Surpluses Will Cause