If There Is an Increase in Government Spending That

question 50

Multiple Choice

If there is an increase in government spending that is financed by issuing bonds,then

• A)interest rates should rise which increases private investment.
• B)interest rates will remain the same unless taxes are reduced as well.
• C)interest rates should fall which increases private investment.
• D)interest rates should rise which decreases private investment.
• E)None of the above.

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Definitions:

Merchandise Valued

The total worth of goods held by a company for sale, often assessed at the end of an accounting period.

South African Firm

A company or business entity registered and operating within South Africa, subject to its legal and regulatory framework.

U.S. Firm

A company or business incorporated or conducting significant operations in the United States.

U.S. Dollars

The official currency of the United States, symbolized as $ and also known as USD.