Author Question: If government spending in a country declines by 10 billion and, at the same time, taxes increase by ... (Read 74 times)

segrsyd · **on:** Jun 30, 2018

If government spending in a country declines by 10 billion and, at the same time, taxes increase by an equal amount, what is the total effect in the economy?
a. Equilibrium real GDP increases
b. Equilibrium real GDP increases by 20 billion
c. Equilibrium real GDP is unchanged
d. Equilibrium real GDP decreases by more than 10 billion and less than 20 billion
e. Equilibrium real GDP decreases by more than 20 billion

Question 2

A supply schedule shows:
a. projected sales as ad spending varies.
b. how many units producers are willing and able to sell at various prices.
c. possible combinations of output as input prices vary.
d. how many units consumers would like to buy at various prices.