Author Question: Assume Congress enacts a 10 billion increase in spending and a 10 billion tax increase to finance ... (Read 109 times)

V@ndy87 · **on:** Jun 30, 2018

Assume Congress enacts a 10 billion increase in spending and a 10 billion tax increase to finance the additional government spending. The result of this balanced-budget approach is a:
a. 20 billion increase in aggregate demand.
b. 10 billion increase in aggregate demand.
c. 100 billion increase in aggregate demand.
d. 10 billion decrease in aggregate demand.

Question 2

The transmission mechanism is the effect of changes in monetary policy on prices, real GDP, and employment.
a. True
b. False
Indicate whether the statement is true or false