Why Might an Expansion in Government Spending Increase the Severity

question 130

Multiple Choice

Why might an expansion in government spending increase the severity of the coordination problem during a recession?

• A) Increases in government spending will not affect the composition of aggregate demand.
• B) Congress is unlikely to approve increases in government spending during a recession.
• C) Spending increases will be driven by political considerations and will often flow into areas where resources are already fully employed.
• D) Government spending can be counted on to flow toward high productivity projects.

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Definitions:

Fungi

A realm comprised of organisms that create spores and derive nutrition from organic substances, encompassing molds, yeast, mushroom species, and toadstools.

Protists

A kingdom of mostly unicellular eukaryotic organisms that are not plants, animals, or fungi, including amoebas, algae, and plasmodium.

Asexual Reproduction

A mode of reproduction where offspring arise from a single organism, inheriting the genes of that parent only, without the involvement of gamete fusion.

Unicellular Organisms

Organisms made up of a single cell, capable of performing all necessary life functions independently.