1) The effects of a change in government expenditures is multiplied throughout an economy
a) only when there is a decrease in expenditure.
b) only when there is an increase in expenditure.
c) because government expenditure generates changes in consumption expenditure.
d) because taxes are left unchanged.
I think the answer is c here, but I'm not sure.
2) Income taxes and transfer payments
a) increase the rate of long-run income growth.
b) act like economic shock absorbers and stabilize fluctuations in income.
c) increase the effects of investment and imports.
d) prevent the economy from moving toward equilibrium.
I think it's either b or c, but I'm not sure at all.
3) Using the AD-AS model, an increase in government expenditure
a) has a full multiplier effect on real GDP, leaving the price level unchanged in the long run.
b) has no impact on real GDP, but will increase potential GDP.
c) increases both real GDP and the price level.
d) has no impact on real GDP.
I'm pretty sure it has an impact on GDP, but not sure about the price level.
-Thanks for any help.
Few Macroeconomic questions?
haha. hated macro. um, i'm gonna go with d, c, b.
(i may or may not be giving your bogus answers to get you for cheating.......)
