According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to Select one: a. a decrease in gross private domestic investment. O b. no change in GDP because only federal government expenditures are included in GDP. O c. a decrease in government expenditure on goods and services. O d. no change in GDP because state and local government expenditure is always canceled out by federal government expenditure.

6. Over time, increases in Potential GDP are the result of O A. inflation O B. increased government spending O C. lower taxes O D. increases in technology

By increasing the taxes by government, the value of consumption will increase. a. True O b. False

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Suppose the current equilibrium GDP is less than potential GDP. Which of the following actions could the government take to close the output gap? Select one or more: O a. No action is necessary O b. Decrease expenditures C. Decreases taxes Od. Increase taxes O e. Increase expenditures

The crowding-out effect is the tendency for a government budget deficit to raise the and investment. O A. price level; increase O B. real interest rate; decrease O C. quantity of output; increase O D. real wage rate; decrease Click to select your answer. 888 :二。 F7 F6

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In the aggregate expenditure (AE) model, the economy is driven to its equilibrium by changes in a. government expenditures on goods and services that are the result of changes in real GDP. O b. autonomous expenditures that are the result of changes in real GDP. investment that are the result of changes in real GDP. O C. O d. induced expenditures that are the result of changes in real GDP.

Suppose in the economy of Richlandia the GDP in 2021 was $ 150 billion. Also, assume that gross investments was $ 40 billion, personal consumption expenditure was $ 80 billion and net exports was -20 billion. What was the value of government spending in Richlandia in 2021? OA.$0 OB. $ 10 billion OC$ 50 billion OD.$ 30 billion

a. The following plot shows the 12-month percentage growth rates in real personal consumption expenditures (blue line) and in real government expenditures (red line). Do you see any evidence that the latter crowds out the former? Why or why not? 20 15 10 5 -10 -15 15 10 5 0 -5 -10 The following plot shows the 12-month percentage growth rates in real GDP (blue line) and in real government expenditures (red line). What, if any, relationship does there appear to be between these two time series? Briefly explain. Rate of Growth of C (blue) and G (red) 2003 3005 2007 2003 2013 2015 2017 2019 Rate of Growth of Y (blue) and G (red) 2011 2009 2007 2005 2013 2015 2021 2017 2023 2019 2021 2023