33) Other things being equal, a reduction in taxes will33) ______A) cause an increase in aggregate demand that is less than the increase in demand due to the due to an equal increase in government spending.B) lead to a reduction in the long run aggregate supply curve as businesses enjoy greater profits.C) lead to a corresponding reduction in interest rates increasing the crowding out effect.D) influence the short run aggregate supply curve but not the aggregate demand curve.
34) Keynes believed that the way to prevent recessions and depressions was to34) ______
35) Ceteris paribus, deficit spending results in higher interest rates, which can 35) ______
36) In the short run, a fiscal policy action that results in a reduction in the size of the budget deficit will cause36) ______
37) Discretionary fiscal policy37) ______A) can be very effective in influencing real GDP during abnormal times, such as when a nation is at war.B) is not very effective in influencing real GDP during normal times because of time lags.C) may reassure investors and consumers that the federal government will be able to avert a major economic downturn.D) all of the above
38) Automatic stabilizers have the effect of38) ______
39) Unemployment compensation programs are called automatic stabilizers because payments increase during39) ______