Ceteris paribus, if the U.S.federal government reduces fiscal spending which of the following will be observed?
A) The aggregate demand curve will shift to the right.
B) The aggregate expenditure in the economy will decrease.
C) The economy will approach potential GDP.
D) The marginal propensity to consume will increase.
E) The average price level will increase.
Correct Answer:
Verified
Q1: The sum of the unemployment rate and
Q2: Fiscal policy is most effective in controlling
Q3: Suppose the equilibrium level of income exceeds
Q4: If aggregate demand intersects aggregate supply in
Q6: The effect of an increase in government
Q7: Which of the following is not a
Q8: If the government wants to close a
Q9: The figure given below depicts the tax
Q10: If government spending in a country declines
Q11: Government spending equals the sum of _,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents