There Is an Increase in Government Expenditures Financed by Taxes

question 71

Multiple Choice

There is an increase in government expenditures financed by taxes and its overall short-run effect on output is larger than the change in government spending.Which of the following is correct?

• A)By themselves,both the change in output and the change in the interest rate increase desired investment.
• B)By themselves,both the change in output and the change in the interest rate decrease desired investment.
• C)By itself,the change in output increases desired investment spending and by itself the change in the interest rate decreases desired investment spending.
• D)By itself,the change in output decreases desired investment spending and by itself the change in the interest rate increases desired investment spending.

---

Definitions:

Threatened Regulation

When businesses or industries adjust their practices in anticipation of potential government regulations that could impact their operations.

Enlightened Self-interest

A philosophy or behavior motivated by understanding that one's own best interest is served by acting in the best interest of others or a community.

Societal Problems

Issues and challenges that affect individuals within a society broadly, often requiring collective efforts for resolution.

Social Responsibility Strategy

A company's approach or plan to contribute to societal goals, well-being, and sustainable development beyond its financial interests.