Author Question: What could cause a decrease in the price level and simultaneously an increase in GDP similar to the ... (Read 155 times)

Deast7027 · **on:** Jun 30, 2018

What could cause a decrease in the price level and simultaneously an increase in GDP similar to the 1920s in the United States?

A) a decrease in interest rates B) an increase in interest rates
C) a decrease in consumer confidence D) an increase in productivity

Question 2

Refer to the above figure. Suppose that the economy starts at AD1. If the government reduces taxes, then the economy goes to AD2, but then falls back to AD3. This is an example of

A) complete crowding-out effect. B) partial crowding-out effect.
C) Ricardian equivalence. D) laissez-faire.