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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
An effective price ceiling will most likely result in which of the following?
A)an increase in producer surplus
B)an increase in consumer surplus
C)a decrease in consumer surplus
D)no change in either producer or consumer surplus
An effective price ceiling will most likely result in which of the following:
A.) An increase in producer surplus
B.) An increase in consumer surplus
C) A decrease in consumer surplus
D) No change in either producer or consumer surplus
