23. Which of the following will cause a decrease in unplanned inventory investment?
a) an increase in interest rates
b) an unexpected increase in consumer spending <-------
c) an increase in the growth rate of real GDP
d) a sudden decrease in consumer wealth
Im thinking its B
26. Which of the following is an expansionary fiscal policy?
a) an increase in the money supply which decreases interest rates
b) an increase in taxes which reduces the budget deficit and decreases consumption
c) a decrease in government spending on the space program
d) an increase in unemployment benefits <------
Suppose the economy is experiencing a recessionary gap. To move equilibrium aggregate output closer to the level of potential output, the best fiscal policy option is to:
a) decrease government purchases.
b) decrease taxes. <-----
c) decrease government transfers.
d) increase real interest rates.
The basic equation of national income accounting shows: GDP = C + I + G + X – IM. When the government uses fiscal policy to make changes to taxes and transfers, this policy primarily affects:
a) IM
b) I
c) C <----
d) X
An increase in the wealth of households, all other things unchanged, may be expected to result in _______ the aggregate consumption function.
a) no effect on
b) an upward shift in <------
c) a downward shift of
d) a movement to the right along

