According to Keynes,the Policy of Incurring Budget Surpluses Will Cause

question 32

Multiple Choice

According to Keynes,the policy of incurring budget surpluses will cause the equilibrium price level to __________ and equilibrium output to __________.

• A)rise; rise
• B)rise; fall
• C)fall; rise
• D)fall; fall
• E)remain the same; remain the same

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Definitions:

Willingness To Pay

This is the maximum amount a consumer is prepared to spend on a good or service, reflecting the value the consumer places on it.

Demand Curve

A graphical representation showing the relationship between the quantity of a good consumers are willing and able to purchase and its price.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to offer for sale.

Consumer Surplus

The imbalance between the funds consumers are willing to dedicate to a good or service and the funds they actually dedicate.