Suppose the Government Attempts to Stimulate the Economy by Increasing

question 101

Multiple Choice

Suppose the government attempts to stimulate the economy by increasing spending without increasing taxes.Which of the following statements is most likely to be accepted by someone who believes in crowding out?

• A) The government's actions will have their intended effect.
• B) The government's actions will cause businesses to become more optimistic about the economy,and they will increase their output even more than the government had intended.
• C) The government's actions will raise interest rates,causing decreased investment and consumption,and the economy will not expand as much as the government had intended.
• D) This is a trick question,because the federal government is required by law to increase taxes by the same amount as it increases expenditures.

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Definitions:

Market Segments

Divisions within a market that congregate consumers or organizations with similar needs and characteristics, allowing for targeted marketing strategies.

Brand Awareness

The degree to which consumers are familiar with the distinctive qualities or image of a particular brand of goods or services.

Unaided Recall

A measure of how well a brand or product is remembered by consumers without any prompts or cues.

Staircase Analysis

An approach to incremental planning or problem-solving that envisions steps or stages, much like climbing a staircase, to reach a desired outcome.