The Japanese Experience of the 1990s Indicates That Increases in Government

question 44

Multiple Choice

The Japanese experience of the 1990s indicates that increases in government spending financed through borrowing will generate

• A)an increase in aggregate demand and real output,just as the Keynesian model predicts.
• B)secondary effects that retard private sector spending and thereby reduce the expansionary impact of fiscal policy.
• C)a recovery of stock market and asset prices within 12 to 18 months.
• D)a decrease in tax rates but an increase in tax revenues,just as the supply-side model predicts.

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Definitions:

Broker Commission

A fee paid to a broker for their services, usually a percentage of the transaction value.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Lower Of Cost

A method used in accounting to value and report assets and inventory at the lower of its historical cost or current market value.

Market

A place or mechanism where parties engage in exchange of goods, services, or information.