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:

Marginal Cost (MC) Curve

A graphical representation showing how the cost to produce one additional unit of output changes as production volume increases.

Pollution Abatement

Measures and efforts undertaken to reduce, control, or eliminate pollution from various sources to protect the environment.

Consumer Tastes

The preferences and inclinations of consumers which influence their buying behavior and choice of products.

Pollution Abatement

Measures or actions taken to reduce, control, or eliminate pollution from various sources in order to protect the environment.