Based on the Keynesian Model, One Reason to Support Government

question 45

Multiple Choice

Based on the Keynesian model, one reason to support government spending increases over tax cuts as measures to increase output is that:

• A) government spending increases the MPC more than tax cuts.
• B) the government-spending multiplier is larger than the tax multiplier.
• C) government-spending increases do not lead to unplanned changes in inventories, but tax cuts do.
• D) increases in government spending increase planned spending, but tax cuts reduce planned spending.

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Definitions:

Exudate

Fluid, such as pus or clear fluid, that leaks out of blood vessels into nearby tissues as a response to inflammation.

Jaundice

A yellowish pigmentation of the skin, tissues, and body fluids caused by the overproduction or poor metabolism of bilirubin.

Jaund

Likely an abbreviation or typo for "jaundice," which is a yellowing of the skin or whites of the eyes due to increased bilirubin levels.

Integumentary

Referring to the body system that encompasses the skin, hair, nails, and exocrine glands, serving as the body's first line of defense against external harm.