Author Question: If the government finances an increase in government purchases with an increase in taxes, which of ... (Read 102 times)

piesebel · **on:** Jun 29, 2018

If the government finances an increase in government purchases with an increase in taxes, which of the following would you expect to see?

A) a decrease in the interest rate B) a decrease in aggregate demand
C) an increase in the exchange rate D) an increase in net exports

Question 2

Fiscal policy actions that are intended to have long-run effects on real GDP attempt to increase ________ through changing ________.

A) aggregate supply; government spending B) aggregate demand; taxes
C) aggregate supply; taxes D) aggregate demand; government spending