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9 Mar 2018
Assume that the federal government is attempting to counter a negative shock through fiscal policy. The federal government increases government spending by $245 billion. As a result of this policy change, total economic activity has increased by $330 billion. Which of the following is most likely to be true?
A. the government has a lot of debt already and is likely to default
B. the negative shock is likely a real shock
C. the increase in government spending led to a substantial increase in imports
D. the multiplier effect outweighs crowding out
Assume that the federal government is attempting to counter a negative shock through fiscal policy. The federal government increases government spending by $245 billion. As a result of this policy change, total economic activity has increased by $330 billion. Which of the following is most likely to be true?
A. the government has a lot of debt already and is likely to default
B. the negative shock is likely a real shock
C. the increase in government spending led to a substantial increase in imports
D. the multiplier effect outweighs crowding out
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answer
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watching
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2 Jun 2021