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:

Acute Dystonic Reaction

A rapid onset of muscle contractions that can lead to involuntary twisting movements or abnormal postures.

Drooling

The unintentional spillage of saliva from the mouth, which can be due to various medical conditions or developmental stages.

Tardive Dyskinesia

A neurological disorder characterized by involuntary, repetitive body movements, often resulting from long-term use of antipsychotic medication.

Fluphenazine Decanoate

A long-acting antipsychotic medication used in the treatment of schizophrenia and other psychotic disorders.