If the Time Path of Government Purchases Does Not Change

question 57

Multiple Choice

If the time path of government purchases does not change and the government cuts lump sum taxes, then:

• A)real GDP does not change.
• B)real consumption does not change.
• C)real gross investment does not change.
• D)all of the above.

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Definitions:

Survival

The ability of an organism to continue living or existing, often despite facing adverse conditions.

Exponential Growth

Growth whose rate becomes ever more rapid in proportion to the growing total number or size.

Arithmetic Growth

A pattern of growth where a population increases by a constant amount in each time period.

Logistic Growth

Population increase that results in an S-shaped curve; growth is slow at first, steepens, and then levels off due to environmental resistance.