Author Question: If there is an increase in government spending that is financed by issuing bonds, then a. ... (Read 150 times)

james9437 · **on:** Jun 30, 2018

If there is an increase in government spending that is financed by issuing bonds, then

a. interest rates should rise which increases private investment.
b. interest rates will remain the same unless taxes are reduced as well.
c. interest rates should fall which increases private investment.
d. interest rates should rise which decreases private investment.
e. None of the above.

Question 2

In the Keynesian model with a variable money wage and variable price level, an increase in the money supply lead to a rise in all of the following except

a. price level.
b. output.
c. real wage.
d. level of employment.
e. all of these rise