If Increases in Defense Spending by the Government "Crowd Out

question 125

Multiple Choice

If increases in defense spending by the government "crowd out" private investment spending, this will lead to

• A) higher levels of real income and wages in the future.
• B) no effects on real income and wages in the future.
• C) lower levels of real income and wages in the future.
• D) higher levels of real income and lower levels of wages in the future.

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Definitions:

Internal Control System

A process implemented by a company to provide reasonable assurance regarding the achievement of objectives related to operations, reporting, and compliance.

Control Activities

Policies, procedures, and mechanisms implemented by an organization to prevent or detect errors or frauds, ensuring the integrity of financial reporting and compliance with laws and regulations.

Risk Assessment

The process of identifying, evaluating, and estimating the levels of risk involved in a situation, followed by the coordination and economical application of resources to minimize, monitor, and control the probability and impact of unfortunate events.

Idle Cash

Cash that is not currently employed in any investment or operation, therefore not earning any return or interest.