In the Basic Keynesian Model, an Increase in Government Purchases

question 79

Multiple Choice

In the basic Keynesian model, an increase in government purchases:

• A)reduces short-run equilibrium output.
• B)increases short-run equilibrium output.
• C)reduces potential output.
• D)increases potential output.

Recognize the global diversity in the legalization and recognition of marriage types.

Analyze the main factors contributing to family structures and dynamics in contemporary societies.

Identify and understand different perspectives on gender inequality and its origins.

Explore the impact of legal and societal changes on family and personal relationships.

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Definitions:

Elasticity of Supply

A measure of how much the quantity supplied of a good or service changes in response to a change in price.

Factor of Production

Inputs used in the production of goods or services, typically categorized into land, labor, capital, and entrepreneurship.

Cross Elasticity of Demand

The ratio of the percentage change in quantity demanded of one good to the percentage change in the price of some other good. A positive coefficient indicates the two products are substitute goods; a negative coefficient indicates they are complementary goods.

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, as they are typically replaced with more expensive alternatives.