In an economy with a vertical aggregate supply curve, a decrease in taxes will affect price level and employment in which of the following ways?

Price Level / Output

Decrease / Increase

Increase / Increase

Increase / Decrease

Increase / No Change

Decrease / No Change

No Change / Decrease

The federal government will increase the budget deficit when:

investment spending increases.

the government spends more than it earns in revenue from taxes.

consumer spending decreases.

the government spends more on debt interest than it earns in revenue from taxes.

Congress increases spending and taxes by the same amount

If investment spending increases while in the up sloping range of the aggregate supply curve, then:

output will decrease.

employment will decrease.

unemployment will decrease.

price level will decrease.

interest rates will decrease.

An open market sale will result in a(n):

decrease in nominal interest rates.

decrease in aggregate supply.

decrease in real interest rates.

increase in aggregate demand.

increase in real and nominal interest rates.