Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the effect of government expenditures G within the total expenditure schedule C+I+G+(X-IM) on the economy? Group of answer choices If the level of

What is the effect of government expenditures G within the total expenditure schedule C+I+G+(X-IM) on the economy? Group of answer choices If the level of business investment makes the total expenditure schedule C+I+G+(X-IM) lie above the 45 degree line at full employment, the economy develops a recessionary gap. If government expenditures are so that the total expenditure schedule C+I+G+(X-IM) is above the 45 degree line at full employment, the economy develops an inflationary gap. If government expenditures are so that the total expenditure schedule C+I+G+(X-IM) is below the 45 degree line at full employment, the economy develops an inflationary gap. Higher or lower government expenditures within C+I+G+(X-IM) when the economy is at full employment will not cause a disequilibrium, and hence, will have no effect on the economy

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Business Law

Authors: Jeffrey F Beatty, Susan S Samuelson

3rd Edition

0324537123, 9780324537123

More Books

Students also viewed these Economics questions

Question

What are the three management skills?

Answered: 1 week ago