If the multiplier is 5 and government expenditures increase by $200 billic OA) AD shifts left by $1000 billion B) AD shifts right by $1000 billion O C) AD shifts left by $40 billion O D) AD shifts right by $40 billion E) SAS shifts right by $1000 billion

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter24: Fiscal Policy
Section: Chapter Questions
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If the multiplier is 5 and government expenditures increase by $200 billion,
A) AD shifts left by $1000 billion
O B) AD shifts right by $1000 billion
C) AD shifts left by $40 billion
D) AD shifts right by $40 billion
O E) SAS shifts right by $1000 billion
O F) SAS shifts left by $1000 billion
Which of the following statements is correct?
I. Expansionary fiscal policy is used to remove a recessionary gap.
II. Expansionary fiscal policy is used to shift AD right.
OA) I only
B) || only
O C) both I and II
D) neither I nor II
Which of the following are examples of contractionary fiscal policy?
A) decreasing government expenditures
B) increasing taxes
C) increasing transfer payments
D) A and B are both contractionary fiscal policies
E) A, B, and C are all contractionary fiscal policies
Transcribed Image Text:If the multiplier is 5 and government expenditures increase by $200 billion, A) AD shifts left by $1000 billion O B) AD shifts right by $1000 billion C) AD shifts left by $40 billion D) AD shifts right by $40 billion O E) SAS shifts right by $1000 billion O F) SAS shifts left by $1000 billion Which of the following statements is correct? I. Expansionary fiscal policy is used to remove a recessionary gap. II. Expansionary fiscal policy is used to shift AD right. OA) I only B) || only O C) both I and II D) neither I nor II Which of the following are examples of contractionary fiscal policy? A) decreasing government expenditures B) increasing taxes C) increasing transfer payments D) A and B are both contractionary fiscal policies E) A, B, and C are all contractionary fiscal policies
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