Suppose that the government budget is balanced (balanced-budget) in the context of the Keynesian model. When there is a decrease in government purchases, which of the following statements is correct? O The planned aggregate expenditure line becomes steeper O There is an unplanned increase in inventories O The planned aggregate expenditure line shifts upwards

Suppose that the government budget is balanced (balanced-budget) in the context of the Keynesian model. When there is a decrease in government purchases, which of the following statements is correct? O The planned aggregate expenditure line becomes steeper O There is an unplanned increase in inventories O The planned aggregate expenditure line shifts upwards

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section9.A: The Simple Algebra Of Income Determination And The Multiplier

Problem 1TY

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