Suppose the Government Wants to Maintain a Balanced Budget

question 256

Multiple Choice

Suppose the government wants to maintain a balanced budget.To achieve this goal,when the economy falls into recession government would need to ________ taxes,which would cause aggregate demand to ________.

• A)decrease; decrease
• B)decrease; increase
• C)increase; decrease
• D)increase; increase

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Definitions:

Imperfectly Competitive Market

A market structure where individual sellers have some control over the price of their goods due to lack of perfect competition.

Wage Rate

The amount of compensation an employee receives per unit of time worked, often expressed hourly.

Workers Employ

The act of hiring labor, where businesses or individuals provide jobs to workers in exchange for their services.

MRC = MRP

An economic condition where a firm's Marginal Resource Cost equals its Marginal Revenue Product, optimizing resource allocation.