Assume That Policy Makers Pass a Budget That Calls for an Increase

question 35

Multiple Choice

Assume that policy makers pass a budget that calls for an increase in government spending. In an open economy, which of the following will occur as a result of this fiscal policy action?

• A) Private saving increases.
• B) Investment decreases.
• C) The current account worsens.
• D) Either A or C occurs.
• E) Either A, B, or C occurs.

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