To Bring About an Increase in the Share of GDP

question 95

Multiple Choice

To bring about an increase in the share of GDP available for nongovernment use,

• A)there will have to be a tax increase.
• B)government purchases will have to decline.
• C)interest rates will have to decline.
• D)government purchases will have to increase.
• E)interest rates will have to increase.

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Definitions:

Preset Price

refers to a price that is established in advance and does not change in response to market conditions or negotiation.

Price Ceiling

A legal maximum price set by the government on certain goods and services to prevent prices from becoming too high.

Price Floor

A government- or authority-imposed minimum price that can be charged for a good or service, typically set above the equilibrium price to aid producers.

Subsidizing Federal

Financial support from the federal government to help reduce the cost of goods and services or to encourage investment in specific sectors.