In a Keynesian Model,a Temporary Decrease in Government Purchases Would

question 13

Multiple Choice

In a Keynesian model,a temporary decrease in government purchases would cause output to ________ and the domestic real interest rate to ________.

• A)not change;increase
• B)not change;decrease
• C)decrease;increase
• D)decrease;decrease

---

Definitions:

Risk of Loss

The potential that an investment's value may decrease or that a business may suffer losses.

Transit

The movement of people or goods from one location to another, which can involve multiple modes of transportation such as buses, trains, and ships.

Conditional Sales Contract

A sales agreement that grants possession of an asset to the buyer, but withholds legal ownership until all terms have been fulfilled, typically payment in full.

Sale Itself

An actual transaction or agreement where a seller agrees to transfer ownership of goods or property to a buyer for a price.