According to the New Classical View,a $20 Billion Increase in Government

question 56

Multiple Choice

According to the new classical view,a $20 billion increase in government expenditures financed by a budget deficit will

• A)stimulate output by $20 billion.
• B)stimulate output more than $20 billion.
• C)stimulate output but by less than $20 billion.
• D)leave output unchanged.

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Definitions:

Base-Year Quantities

Quantities of goods and services in a specific base year used for comparison or calculation purposes in economic analysis.

Laspeyres Index

A measure of the change in the cost of purchasing a specified set of goods and services over time, using the quantities bought in a base period as weights.

Bankruptcy Law

Legal statutes and regulations that govern the process by which individuals or enterprises can declare their inability to pay their debts and seek relief.

Debtor

A debtor is an individual or entity that owes money to another party, often a creditor, as a result of borrowing funds or failing to pay for goods or services.