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:

Plasma Concentration

The amount of a substance, usually a drug, present in the blood plasma at any given time, important for determining dosages and understanding pharmacokinetics.

Arteries

Blood vessels that carry oxygenated blood away from the heart to various parts of the body.

Capillary Bed

A network of capillaries, small blood vessels, enabling the exchange of oxygen, carbon dioxide, and nutrients.