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.

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Definitions:

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service.

Sales

The exchange of a commodity for money; the action of selling something.

Classified Ads

Short advertisements placed in a newspaper, magazine, or online, usually categorized by topic, such as jobs, real estate, and services.

Flat Fee

A pricing structure where a single fixed rate is charged for a service, regardless of usage or time required.