According to the Traditional Keynesian Approach, If the Government Cuts

question 210

Multiple Choice

According to the traditional Keynesian approach, if the government cuts taxes, then

• A) real Gross Domestic Product (GDP) will rise and the price level will remain constant.
• B) real Gross Domestic Product (GDP) will fall but the price level will rise.
• C) both real Gross Domestic Product (GDP) and the price level will rise.
• D) real Gross Domestic Product (GDP) will remain constant but the price level will rise.

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Definitions:

International Agreements

Treaties or accords between countries that govern their mutual relations and commitments.

Senate

The Senate is one of the two chambers of the United States Congress, responsible for making and passing federal laws, consisting of two senators from each state.

Nontariff Barrier

Any impediment to international trade other than tariffs.

Embargoes

Government-imposed restrictions on trade with a particular country or the exchange of specific goods, often used as a political tool.