Author Question: In the Keynesian model with a fixed money wage but a flexible price level, an increase in taxes will ... (Read 180 times)

xclash · **on:** Jun 30, 2018

In the Keynesian model with a fixed money wage but a flexible price level, an increase in taxes will lower

a. output and the price level, but leave the interest rate unchanged.
b. output, the price level and the interest rate.
c. output and the interest rate, but leave the price level unchanged.
d. output and the price level, but increase the interest rate.
e. the price level and the interest rate, but leave output unchanged.

Question 2

Automatic stabilizers drive changes in

a. the total deficit.
b. the cyclical deficit.
c. the structural deficit.
d. monetary policy.
e. both b and c.