If Government Purchases and Taxes Are Both Increased by the Same

question 37

Multiple Choice

If government purchases and taxes are both increased by the same lump sum, we can expect the following in the medium run:

• A)output, prices, and interest rates will all remain unchanged
• B)output, prices, and interest rates will all decrease
• C)output, prices, and interest rates will all increase
• D)output and prices will remain the same but interest rates will increase
• E)output and prices will increase but interest rates will remain the same

---

Definitions:

Opt-in

A voluntary action by a user to agree to receive information from a particular service, often related to subscriptions or marketing.

E-consent

The process of obtaining agreement or permission through electronic means, often used in digital transactions and agreements.

Advertising

The act or practice of calling public attention to products, services, or needs through paid announcements by an identified sponsor.

Permission Marketing

A marketing strategy where businesses obtain explicit consent from potential customers to provide them with promotional messages or advertisements.