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

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Definitions:

Positive Development

A process of improving individual traits, behaviors, and social interactions to foster well-being and success.

Developmental Scientists

Experts who study the patterns of growth, change, and consistency through the lifespan, focusing on how and why individuals develop over time.

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Emotions that arise from reflections on oneself, such as guilt, shame, embarrassment, and pride, often influenced by social evaluations.

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Classification of the patterns of attachment behavior exhibited by children towards their caregivers, as identified in psychological studies.