In the Short-Run Macro Model,an Increase in Government Spending

question 108

Multiple Choice

In the short-run macro model,an increase in government spending

• A) may reduce real GDP
• B) partially crowds out private investment spending
• C) usually crowds out exports
• D) usually crowds out spending on services
• E) requires an increase in taxes.

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Definitions:

Horizontal Differentiation

A strategy where products are made different from those of competitors on aspects other than price, such as quality or features, while aimed at satisfying the same basic need.

Product Mix

The variety of products a company offers for sale to meet market demand and enhance profitability.

Celebrity Endorsement

A marketing strategy where famous personalities are used to promote a product, service, or brand, leveraging their fame and influence.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, establishing a market balance.