If $500,000 in New Taxes Is Raised and Spent on Building

question 149

Multiple Choice

If $500,000 in new taxes is raised and spent on building a new school and $300,000 in private spending would have been spent anyway,how much is added to short-run aggregate demand?

• A) $100,000
• B) $200,000
• C) $300,000
• D) $500,000

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Definitions:

Maximum Benefits

The highest possible gain or advantage that can be achieved from a particular action or situation.

Listen During

The act of paying close attention to and actively processing information while it is being communicated.

Negotiation Session

A designated period during which parties come together to discuss and reach agreements on specific matters.

Distrust

A feeling of doubt or skepticism towards someone or something's reliability or trustworthiness.