Consider a Closed-Economy AD/AS Macro Model

question 36

Multiple Choice

Consider a closed-economy AD/AS macro model.An expansionary fiscal policy will generally increase the government's budget ________ and also tends to ________ and thus ________ private investment.

• A)deficit; raise interest rates; decrease
• B)surplus; reduce interest rates; increase
• C)deficit; raise interest rates; increase
• D)surplus; reduce interest rates; decrease
• E)deficit; reduce interest rates; increase

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Definitions:

Common Stock

Equity ownership in a corporation, with rights to vote on corporate matters and receive dividends.

Operating Revenue

Operating revenue refers to the income generated from a company's primary business activities, such as sales of goods or services.

Other Revenues and Gains

Income streams and financial gains that do not arise from the primary operations of a business.

Consolidated Financial Statements

Financial reports that combine the accounting information of a parent company with its subsidiaries, providing a comprehensive overview.