Answer to Question #332174 in Macroeconomics for KGAO

Question

1.Which one of the following statements is correct?

a. a decrease in net exports will decrease the equilibrium level of income

b. an increase in the tax rate will increase the size of the multiplier

c. a change in the tax rate has no impact on the size of the multiplier

d. an increase in net exports will decrease the equilibrium level of income

2.Which one of the following statements is correct regarding the Keynesian model with the government sector and the foreign sector?

a. government expenditure is autonomous

b. exports and imports are a function of the interest rate

c. an increase in government expenditure will decrease the equilibrium level of income

d. a decrease in net exports will increase the equilibrium level of income

Answer 1

1.

a. a decrease in net exports will decrease the equilibrium level of income

2.

c. an increase in government expenditure will decrease the equilibrium level of income