Question
If government spending is increased by $100 billion and taxes are raised by the same amount, the Keynesian model predicts that: A. RGDP will increase
If government spending is increased by $100 billion and taxes are raised by the same amount, the Keynesian model predicts that:
A. RGDP will increase by more than $100 billion
B. Output will not change
C. RGDP will increase by the amount of government spending increase
D. RGDP will decline by the amount of the tax increase
E. RGDP will decrease by less than $100 billion
Why?
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Principles of Macroeconomics
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
12th edition
978-0134078809
