In the Basic Keynesian Model,an Increase in Government Purchases

question 192

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.
• E) moves short-run equilibrium output to potential output.

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Definitions:

Acceptance by Silence

A legal principle where silence or inaction can be interpreted as acceptance of an offer under certain circumstances, typically when past behavior has established such a pattern.

Option Contract

A contract granting one the right, but not the obligation, to buy or sell an asset at a predetermined price within a specific timeframe.

Implied-in-Fact Contract

An implied-in-fact contract is an agreement that is not expressed in words but is inferred from the actions or conduct of the parties involved.

Original Agreement

The initial contract or understanding reached between parties, before any amendments, modifications, or terminations.