chapter 12

Question 1

multiplier affect

Answer 1

an increase in autonomous expenditure leads to a larger increase in real gdp

Question 1

crowding out

Answer 1

decline in private expenditures or private investment expenditures as a result of an increase in government purchases

Question 2

federal government debt

Answer 2

total value of bonds outstanding which is equal to the sum of past budget deficits, net of surpluses

Question 4

pre tax

Answer 4

difference between the pretax and postax return to an economic activity