Aggregate demand will decrease when there are decreases in government spending.
ID: 1226776 • Letter: A
Question
Aggregate demand will decrease when there are decreases in government spending. True False
Aggregate Expenditure line shifts downward if imports are greater than exports. True False
The multiplier effect occurs because
A. increases in income cause a chain reaction of spending by many businesses and individuals
B. as saving levels increase, a greater pool of loanable funds is available for investment spending by businesses
C. businesses copy the spending decisions of their competitors
D. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels
When the average price level in the United States, relative to the average price levels in other countries, rises, this tends to raise imports and lower exports. True False Which one of the following is not part of our money supply?
A. Demand Deposits
B. Travelers' checks
C. Dollar bills
D. Gold
An expansionary gap is equal to actual short-run output minus potential output. True False
If the actual price level exceeds the expected price level reflected in long-term contracts, firms will find production less profitable than they had expected and will increase the quantity of output supplied. True False Back in the Middle Ages, the only safe place to put your money was
A. in commodity futures
B. in real estate
C. in Treasury bills
D. in goldsmiths' safe
Suppose a goldsmith (banker) had a certain number of gold coins in his safe and he kept writing more and more goldsmiths' receipts for people who come to him to borrow money. What would be happening to his reserve ratio?
A. fall
B. zero
C. rise
D. stay the same
The basic reserve ratio on checking deposits of large banks is now around
A. 1%
B. 10%
C. 25%
D. 50%
Large budget deficit leads to higher interest rate (crowding out effect), in turn, leads to deccrease in investment spending, in turn, lower economic growth in the long run.
True False
Explanation / Answer
1)
True
as government spending is key part of the economic output , so as government spending decreases that means aggregate demand will decline.
we do first question as per chegg policy