A $200 Increase in Government Purchases Has the Same Effect

question 9

True/False

A $200 increase in government purchases has the same effect on the equilibrium level of real GDP as a $200 decrease in autonomous net taxes would.

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Definitions:

Principle of Utility

A foundational concept in utilitarianism that suggests the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Kant

Immanuel Kant, a German philosopher whose work in metaphysics, ethics, and aesthetics played a central role in modern philosophy, emphasizing the limits of human knowledge and the importance of moral principles.

General Policy

Broad, overall plans, guidelines, or procedures designed to guide actions toward achieving long-term goals or objectives.

Kant's Moral Theory

Kant's Moral Theory emphasizes the importance of duty, moral law, and the principle of acting in such a way that the action could be universalized.