The Long-Run Interest Rate Effect of Decreased Government Purchases Is

question 159

Multiple Choice

The long-run interest rate effect of decreased government purchases is that

• A)consumption is lower, and investment is higher.
• B)consumption and net exports are the same, and investment is higher.
• C)investment is higher.
• D)consumption, investment, and net exports are all higher.
• E)consumption and net exports are higher.

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Definitions:

Federal Law

Federal law refers to the body of law created by the federal government of a country, which applies to the entire nation and supersedes laws made by local jurisdictions.

Cumulative Summary

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FICA Taxes

Taxes imposed on both employees and employers to fund Social Security and Medicare, based on a percentage of earned wages.

Payroll Tax Expense

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