In the Basic Keynesian Model,to Close a Recessionary Gap of $5

question 67

Multiple Choice

In the basic Keynesian model,to close a recessionary gap of $5 billion,government purchases must be

• A) increased by $5 billion.
• B) decreased by $5 billion.
• C) increased by more than $5 billion.
• D) increased by less than $5 billion.
• E) decreased by less than $5 billion.

---

Definitions:

Double Coincidence

A situation in a barter economy where two parties each hold an item the other wants, allowing them to make an exchange without the use of money.

Federal Deregulation

The process of reducing or eliminating government rules and restrictions on the business sector by federal authorities.

Savings And Loan

Financial institutions that primarily accept savings accounts and provide mortgage lending, historically focusing on residential mortgages.

Taxpayers

Individuals or entities that are obliged to pay taxes to a government authority based on their income, property, or consumption.