If the government increases taxes by $20 billion and decreases spending by $20 billion, equilibrium output increases by $20 billion.

Name: If the government increases taxes by $20 billion and decreases spending by $20 billion, equilibrium output increases by $20 billion.
Brand: Quizplus
Rating: 4.7 (58 reviews)

Question

Quizplus · Accepted Answer

The government's actions will result in a decrease in aggregate demand by $20 billion, which will lead to a decrease in equilibrium output.

If the Government Increases Taxes by $20 Billion and Decreases