When Comparing a $100 Billion Increase in Government Expenditure to a $100

question 24

Multiple Choice

When comparing a $100 billion increase in government expenditure to a $100 billion decrease in tax revenue, the effect of the increase in government expenditure on aggregate demand is

• A) negative, whereas the effect of the tax decrease is positive.
• B) positive, whereas the effect of the tax decrease is negative.
• C) greater than the effect of the tax decrease.
• D) equal to the effect of the tax decrease.
• E) less than the effect of the tax decrease.

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Definitions:

Structural Functionalism

A sociological theory that views society as a complex system whose parts work together to promote solidarity and stability, focusing on social structures and their functions.

Large-scale Social Structures

The overarching frameworks and institutions that shape societies, including economies, political systems, and social norms, influencing individual and group interaction.

Institutions

Established organizations or foundational systems within a society that dictate and regulate patterns of behavior or norms, such as legal or educational systems.

Actors

Individuals or entities that take action or play a role in a particular process, system, or context, contributing to its dynamics.