In the Short-Run Keynesian Model, to Close an Expansionary Gap

question 49

Multiple Choice

In the short-run Keynesian model, to close an expansionary gap of $10 billion dollars government purchases must be:

• A)increased by $10 billion.
• B)decreased by $10 billion.
• C)increased by more than $10 billion.
• D)decreased by less than $10 billion.

---

Definitions:

General Ledger

A comprehensive record of all financial transactions within an organization, serving as the foundation for a company's financial statements.

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business, including expenses, debt payments, and purchases.

Credit To Cash

A transaction in accounting where a credit sale is paid off, converting receivables into cash.

Accounts Payable

Liabilities of a business that represent money owed to suppliers or creditors for goods and services received.