An increase in business investment spending has the same effect on the level of ad as an increase in the same amount of government spending. -true 2) If the government increased taxes by $10 at the same time it increased spending by $10 there would be no effect on the level of AD. 3) If social security payments to retirees increase, AD will increase and raise Y*. -true
so this is a stretch, but ive done this practice quiz like 3 times and cant figure out which questions ive got wrong. do you think you can tell me which ones i missed? it doesnt tell me which ones are wrong. #2 is unanswered because i didnt get it the second time around. (the questions come from a pool). and i must have forgotten to write down one question. i got an 85%
1) An increase in business investment spending has the same effect on the level of ad as an increase in the same amount of government spending. -true
2) If the government increased taxes by $10 at the same time it increased spending by $10 there would be no effect on the level of AD.
3) If social security payments to retirees increase, AD will increase and raise Y*. -true
4) Tax cuts in the classical range of the AS will stimulate output and
5) Increasing welfare payments by borrowing money to do so will increase AD- true
6) if the mpc increases, the multiplier decreases- false
7) if the mps increases the multiplier decreases -true
8) part of the cost of growing government budget deficits is and “
9) tax cuts in the classical range of the
10) if the AS curve were flat/horizontal an increase in AD would not be inflationary- true
11) an increase in AD might be cause by improving technology in manufacturing processes. -false? That would effect AS.
12) Inflation is thought to not be a problem in the Keynesian range of the AS curve- true
13) An increase in AD might be the result of higher taxes on households. -false
14) Crowding out, when it occurs, involves increasing interest rates. -false
15) In the Keynesian range of the AS curve, increases in taxes will raise unemployment- true
16) If the MPC is .95 and taxes are increased by $20, AD will increase by $380- true
17) If Y* is more than Yfe, the economy is in the classical range of the AS curve- true
18) tax cuts directed at higher income individuals will do more to stimulate the economy than those directed to lower income individuals, in the keynesian model.-true
19) growing federal budget deficits are a problem cased by kenynesian economics- false
20) Keynes advocated using government deficits in times of depression -true
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