Suppose There Is a Decrease in Government Spending

question 8

Multiple Choice

Suppose there is a decrease in government spending. Such a fiscal policy action will cause:

• A) the natural real interest rate to rise.
• B) the natural real interest rate to fall.
• C) ambiguous effects on the natural real interest rate.
• D) no effect on the natural real interest rate.
• E) the natural real interest rate falls when the nominal rate falls.

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Definitions:

Sociable-intimate

The desire or tendency of an individual to engage in close and friendly relationships.

Dependent-dominant

A term that doesn't correspond to a well-defined concept in the provided context, potentially relating to dynamics within relationships or systems where one entity is dependent yet holds sway or influence over others.

New England Orchard Town

A town located in the New England region of the United States known for its cultivation and production of orchard fruits, such as apples and pears.

Prosocial Behaviors

Actions intended to benefit others, including behaviors like helping, sharing, and comforting.