The Primary Benefit to the Macroeconomy of Increasing Government Spending

question 57

Multiple Choice

The primary benefit to the macroeconomy of increasing government spending is a(n)

• A)decrease in the price level.
• B)decrease in real GDP.
• C)increase in the price level.
• D)decrease in the unemployment rate.

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Definitions:

Profitability Index

A measure used in capital budgeting to evaluate the profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.