Everything Else Held Constant,a Balanced Budget Increase in Government Spending

question 92

Multiple Choice

Everything else held constant,a balanced budget increase in government spending (that is,an increase in government spending that is matched by an identical increase in net taxes) will

• A)increase aggregate demand,but not by as much as if just government spending increases.
• B)increase aggregate demand by more than if just government spending increases.
• C)not affect aggregate demand.
• D)decrease aggregate demand.

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Definitions:

Special Journals

Accounting journals designed for recording a specific type of transaction in a detailed manner, such as sales or purchases.

General Journal

A bookkeeping journal where all types of financial transactions are initially recorded, before being transferred to specific accounts in the general ledger.

Closing Journal Entries

Entries made at the end of an accounting period to transfer balances from temporary to permanent accounts.

Revenue Journal

An accounting ledger that records all transactions involving the income earned by the business, specifically from its operations and activities.