In the New Keynesian Model, an Increase in Current Government

question 48

Multiple Choice

In the New Keynesian model, an increase in current government spending shifts

• A)the output supply curve to the right.
• B)the production function up.
• C)the output demand curve to the left.
• D)the output supply curve to the left.
• E)the output demand curve to the right.

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Definitions:

Special Economic Zones

Geographically designated areas within a country where business and trade laws differ from the rest of the country and are more favorable to attract investments and economic activities.

Rapid Economic Growth

A period where a country's economy expands at a faster rate than its historical average, often leading to increased wealth and employment opportunities.

Foreign Investment

Investment by individuals or companies in assets or businesses located in another country.

Duty Drawbacks

Duty drawbacks are refunds of customs duties paid on imported materials that are later exported, either in the same or a modified form, encouraging international trade.