In the Basic Keynesian Model,an Increase in Transfer Payments

question 16

Multiple Choice

In the basic Keynesian model,an increase in transfer payments

• 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:

Average Annual Return

The arithmetic mean percentage of gain or loss on an investment per year over a given period.

Taxes and Fees

Compulsory charges imposed by government entities or regulatory bodies on business transactions, goods, and services.

Government Agency

An organization under the government that is responsible for the specific area of administration or function according to law.

Simple Payback

A financial metric that calculates the time required to recoup the initial investment in a project or asset through cash inflows or savings.