Q60. If the government increases spending and raises taxes by just enough to finance this increase it will--------------------

a. Reduce output                     b. increase the MPC                  c. leave output unchanged                 d. increase output                  

Q61. Starting from a balanced budget, for a given tax rate, an increase in income will cause the government budget to

a. Remain unchanged              b. move into surplus                     c. move into deficit                          d. both b and c              

Q62. For given government spending and taxation, the government budget deficit will grow in--------- and decline in-------

a. booms, booms                  b. booms, recessions                 c. recessions, booms                     d. recession, recession                      

Q63. When investment is assumed to autonomous the slope of the AD schedule is determined by the--------------------------

a. marginal propensity to consume   b. average propensity to consume    c. marginal propensity to invest   d. disposable income     

Q64. Nominal GDP measures income ---------------------------------------

a. At present time               b. At current prices        c. Corrected for tax changes       d. Corrected for changes in interest rates         

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The detailed answer for the above question is provided below Q60 b Increase the MPC If the governmen... View the full answer