Changes in Government Spending Are Not Likely Causes of Business

question 20

Multiple Choice

Changes in government spending are not likely causes of business cycles because government spending induced business cycles would, counterfactually predict

• A) countercyclical consumption.
• B) procyclical consumption.
• C) countercyclical employment.
• D) procyclical employment.
• E) countercyclical real wages.

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Definitions:

General Cash Offers

A public offering in which securities are sold for cash to the general investing public.

Flotation Costs

The costs associated with issuing new securities, including underwriting fees, legal expenses, and registration fees.

Rights Offerings

A method by which a company raises capital by giving existing shareholders the right to buy additional shares at a discount.

Market Value

The existing market price for the acquisition or sale of an asset or service.