To ameliorate the effects of a recession, a government could enact appropriate policies including ________.

Group of answer choices

increasing tax rates

increasing taxes by a fixed amount

increasing government purchases

decreasing defence spending

Figure 18.5

Refer toFigure 18.5.If government purchases increase by $100 billion and lead to an ultimate increase in aggregate demand as shown in the graph, the difference in real GDP between pointAand pointBwill be ________.

Group of answer choices

$100 billion

less than $100 billion

more than $100 billion

There is insufficient information given here to make a conclusion.

Crowding out results in _________.

Group of answer choices

higher interest rates, a lower exchange rate, and lower net exports.

higher interest rates, a higher exchange rate, and lower net exports.

lower interest rates, a lower exchange rate, and lower net exports.

lower interest rates, a higher exchange rate, and lower net exports.

Government deficits tend to increase during _________.

Group of answer choices

recessions and booms

periods of economic contraction and recession

periods of below- or above-average growth

periods of increased financial uncertainty