Consider a Simple Macro Model with a Constant Price Level

question 83

Multiple Choice

Consider a simple macro model with a constant price level and demand-determined output.The inclusion of government in such a model affects desired aggregate expenditure directly through ________ and indirectly through ________.

• A)the net taxes; the government purchases of goods and services
• B)the net taxes; its affect on disposable income
• C)the government purchases of goods and services; its effect on net exports
• D)the government purchases of goods and services; its effect on disposable income
• E)the government purchases of goods and services; its effect on investment

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Definitions:

Guarantor

A party that agrees to be responsible for the debt or obligation of another if the original obligor fails to meet their obligations.

Statute of Frauds

A legal principle that requires certain types of contracts to be executed in writing and signed by the party to be charged.

Deed of Trust

A legal document in some states that involves a borrower, lender, and a trustee, securing a real estate transaction as collateral for a loan.

Surety

A person or entity that takes responsibility for the performance of another's obligations, such as fulfilling the terms of a contract or repaying a loan.