An important assumption in Keynesian theory is that

According to Keynesian analysis, if government expenditures and taxes are increased by the same amount, which of the following will occur?

A fiscal stimulus works to close a recessionary gap by shifting the

Income taxes create a wedge between the wage rate paid by firms and the wage rate workers take home.

An income tax hike decreases the supply of labor but has no effect on employment or potential GDP

An income tax cut increases potential GDP by shifting the nation's production function upward.

Taxes on interest income can drive a wedge between the interest rate borrowers pay and in the interest rate lenders receive

According to classical economists, which of the following will occur to move this economy to long-run equilibrium

All the following are true regarding the horizontal portion of the short-run aggregate supply curve except

According to the short-run Phillips curve, an increase in inflation will accompany

Which of the following is an example of expansionary fiscal policy?

Which of the following is the best example of a non-discretionary fiscal policy to combat demand-pull inflation?