According to Non-Keynesians, How Will an Increase in Government Spending

question 148

Multiple Choice

According to non-Keynesians, how will an increase in government spending financed by borrowing during a recession affect recovery?

• A) Higher future taxes and interest rates will be required to finance the larger debt and this will weaken the recovery.
• B) Repayment of the debt can always be shifted to the future, making it possible to keep tax rates low and thereby strengthen the recovery.
• C) Higher interest payments will increase future government spending, and thereby promote a stronger the recovery.
• D) The increase in government spending will exert a multiplier effect on the economy, leading to a stronger recovery.

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Definitions:

Job Design

A method of setting duties and responsibilities of a job with the intention of improving productivity and performance

Division Of Labor

The assignment of different parts of a manufacturing process or task to different people in order to improve efficiency.

Organizational Development

A planned effort to increase an organization’s effectiveness and capability through interventions in its processes, structures, and strategies.

Work Activities

Refers to the tasks or responsibilities that are performed by individuals within their job roles, contributing to the goals of the organization.