Answer to Question #332886 in Microeconomics for Unknown

Question

Which statement is correct?

O a. Government cannot increase the equilibrium level of income by increasing government spending.

O b. Government can increase the equilibrium level of income by increasing taxes.

O c. Government can decrease the equilibrium level of income by decreasing taxes.

O d. Government can reduce the equilibrium level of income by increasing government spending.

O e. Government can reduce the equilibrium level of income by decreasing government spending.

Answer 1

e. Government can reduce the equilibrium level of income by decreasing government spending.