AP Macroeconomics › How to find the effect of deficit spending on output
According to Keynesian Economics, which of the following would weaken the multiplier effect?
An increase in interest rates
An increase in government spending
High velocity of money
Selling government bonds
Which of these is a negative aspect of a law mandating a balanced budget?
It is pro-cyclical (makes the business cycle more severe)
It creates excess funds for public projects.
It leads to increasingly high taxes.
It leads to fluctuating tax rates.