Macroeconomics- C719 Western Governors University Questions And Answers 100% Verified A+ Guaranteed

According to the political business cycle theory, when inflation is not a problem, a politician seeking reelection is likely to pursue {Ans: expansionary fiscal policy prior to the election, so voters will be satisfied with the state of the economy Political business cycle theory suggests that incumbents are more likely to win when economic conditions are favorable immediately before an election}True or false. Events that shift the aggregate supply curve to the right lead to economic growth {Ans: True Anything that shifts the aggregate supply curve to the right is a source of economic growth because it will produce a rise in real output and income}At higher rates of interest, households save {Ans: more When interest rates are higher, households will save more}Because of the multiplier process, if a tax cut causes consumption spending to initially rise by $100, the resulting change in income is likely to be {Ans: larger than $100, as spending by one person creates additional income for another person The multiplier process magnifies the initial change in spending into a much larger change because each time someone receives additional income, their spending rises by the added income multiplied by the marginal propensity