Author Question: Keynesian analysis stresses that a tax cut that increases the government's budget deficit or reduces ... (Read 155 times)

lidoalex · **on:** Jun 30, 2018

Keynesian analysis stresses that a tax cut that increases the government's budget deficit or reduces its budget surplus:
a. is appropriate during a period of inflation.
b. will increase the money supply.
c. will stimulate aggregate supply and, thereby, promote employment.
d. will stimulate aggregate demand and, thereby, promote employment.

Question 2

The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:
a. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
b. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
c. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
d. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
e. rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.