According to the Traditional Keynesian Analysis, If the Government Increases

question 195

Multiple Choice

According to the traditional Keynesian analysis, if the government increases spending and pays for all of it by raising current taxes, then

• A) aggregate demand will decrease.
• B) a budget deficit will occur.
• C) a budget surplus will occur.
• D) aggregate demand will increase.

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Definitions:

Hawthorne Effect

A phenomenon where individuals modify an aspect of their behavior in response to their awareness of being observed.

Productivity

The measure of the efficiency of a person, machine, system, etc., in converting inputs into useful outputs.

Physical Work Conditions

Aspects of the work environment that impact employees' physical health and safety, such as ergonomics, noise, and temperature.

Hawthorne Effect

The phenomenon in which participants alter their behavior due to their awareness of being observed in an experiment or study.