In 2017, in proposing a $1 trillion increase in government spending on infrastructure, President Trump argued that the spending would increase total employment in the United States. Source: Ted Mann and Michael C. Bender, "President Trump to Launch Push for Infrastructure Investment," Wall Street Journal, June 4, 2017. In the short run, increases in federal spending will increase real GDP and employment if A. the economy is producing at less than its potential output and has some cyclical unemployment. B. wages and prices do not change. OC. the economy is experiencing inflation. D. the price level remains stable. The federal government would not want to increase its spending, even if the result were to increase real GDP and employment in the short run, if A. tax receipts are falling. B. productivity is falling. C. it would result in deflation. D. it would lead to a greater federal deficit and an increase in the national debt. President Trump was assuming that in 2017, the economy was A. able to create more jobs and expand without increasing the inflation rate. B. growing enough that the budget deficit would disappear. C. at full employment. D. in a severe recession and needed a job boost.

In 2017, in proposing a $1 trillion increase in government spending on infrastructure, President Trump argued that the spending would increase total employment in the United States. Source: Ted Mann and Michael C. Bender, "President Trump to Launch Push for Infrastructure Investment," Wall Street Journal, June 4, 2017. In the short run, increases in federal spending will increase real GDP and employment if A. the economy is producing at less than its potential output and has some cyclical unemployment. B. wages and prices do not change. OC. the economy is experiencing inflation. D. the price level remains stable. The federal government would not want to increase its spending, even if the result were to increase real GDP and employment in the short run, if A. tax receipts are falling. B. productivity is falling. C. it would result in deflation. D. it would lead to a greater federal deficit and an increase in the national debt. President Trump was assuming that in 2017, the economy was A. able to create more jobs and expand without increasing the inflation rate. B. growing enough that the budget deficit would disappear. C. at full employment. D. in a severe recession and needed a job boost.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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