1.In the neoclassical view of the economy, expansionary fiscal policy cannot work to raise equilibrium output because

it will raise unemployment.

it will disincentivize production.

flexible prices will eventually choke off any increase in aggregate demand.

2.Autonomous expenditure does NOT depend on what factor?

Consumer spending

Future expectations

GDP/output

3. Each of the following statements are about government spending as function of national income. Which one of the statements is a false statement?

On a Keynesian cross diagram the government spending appears as a horizontal line.

The budget process is what is used by the federal, state and local governments determine the level of government spending.

There is fluctuation in government spending.

Answer rating: 100% (QA)

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