16. Given a marginal propensity to consume of 0.8, an increase of 100 in government spending and an increase of 80 in taxes will cause the level of output and income to... 1. 2. 3. 4. 5. increase by 180. be unchanged. increase by 100 increase by 80. decrease by 80. 17. Which of the following statements is/are correct? a. b. The main instrument of fiscal policy is the budget. An increase in income forces government to increase its expenditure according to our model. Government spending and taxation are autonomous variables in our model. If government revenue is greater than government expenditure, then we have a budget deficit. Expansionary fiscal policy means that government spending has to be increased and/or taxes have to be decreased in order to increase aggregate demand in the economy d. 1. 2. 3. 4. 5. a, b, c and e b, c, d and e Only a, cand e Only a and c None of the options 1 to 4 is correct 18. In the goods market model, the value of the multiplier will increase if... 1. 2. 3. 4. taxes (T) increase. government spending (G) increases. the marginal propensity to consume (c) increases. investment spending (1) increases 19. Given a marginal propensity to consume of 0.6 an increase of 200 in government spending and an increase of 240 in taxes will cause the level of output and income to ... 1. 2. 3. decrease by 140. increase by 140. decrease by 160. increase by 240. increase by 160. 4. 5.
16. Given a marginal propensity to consume of 0.8, an increase of 100
16. Given a marginal propensity to consume of 0.8, an increase of 100 in government spending and an increase of 80 in taxes will cause the level of output and income to... 1. 2. 3. 4. 5. increase by 180. be unchanged. increase by 100 increase by 80. decrease by 80. 17. Which of the following statements is/are correct? a. b. The main instrument of fiscal policy is the budget. An increase in income forces government to increase its expenditure according to our model. Government spending and taxation are autonomous variables in our model. If government revenue is greater than government expenditure, then we have a budget deficit. Expansionary fiscal policy means that government spending has to be increased and/or taxes have to be decreased in order to increase aggregate demand in the economy d. 1. 2. 3. 4. 5. a, b, c and e b, c, d and e Only a, cand e Only a and c None of the options 1 to 4 is correct 18. In the goods market model, the value of the multiplier will increase if... 1. 2. 3. 4. taxes (T) increase. government spending (G) increases. the marginal propensity to consume (c) increases. investment spending (1) increases 19. Given a marginal propensity to consume of 0.6 an increase of 200 in government spending and an increase of 240 in taxes will cause the level of output and income to ... 1. 2. 3. decrease by 140. increase by 140. decrease by 160. increase by 240. increase by 160. 4. 5.
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