New Classical Economists Stress That an Increase in Government Expenditures

question 91

Multiple Choice

New classical economists stress that an increase in government expenditures financed by borrowing rather than taxes will

• A) exert a strong expansionary impact on aggregate demand and real output.
• B) affect the timing of taxes but not their magnitude.
• C) lead to higher interest rates.
• D) undermine confidence and reduce the level of private saving.

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Definitions:

Shakers

A religious sect founded in the 18th century, known for their communal living, celibate lifestyle, and distinctive practices of worship including dancing, which led to their name.

Free Will

Free will is the concept that individuals have the ability to make choices that are not predetermined by biological or external factors, emphasizing human agency and moral responsibility.

Sin

An act considered a transgression against divine law or moral principles, often associated with religious beliefs.

Traditional Religious Beliefs

The long-established spiritual beliefs and practices followed by various cultural or ethnic groups.