If the Time Path of Government Purchases Does Not Change

question 6

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 increases.
• C)real gross investment falls.
• D)all of the above.

---

Definitions:

Sensations

The immediate and basic experiences generated from sensory stimuli.

Ritual Prohibitions

Rules or taboos within a culture or religion that restrict certain actions or behaviors as part of ritual practices.

Culturally Prescribed Avoidances

Specific prohibitions or restrictions that are imposed by a culture on the behavior of its members, often for religious, moral, or social reasons.

Taboos

Cultural prohibitions or restrictions on certain actions, topics, or substances, based on societal norms and values.