In Which of the Following Ways Does Government Affect the Consumption

question 82

Multiple Choice

In which of the following ways does government affect the consumption component of planned aggregate expenditures?

• A)Through net taxes,which change disposable income
• B)By purchasing goods and services,which increase consumption
• C)By using subsidies to encourage firms to invest
• D)By reducing the interest rate to encourage firms to invest
• E)By producing public goods

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Definitions:

Government Deficit

The financial situation that occurs when a government's expenditures exceed its revenues during a specific period, leading to borrowing or debt accumulation.

Economic Stimulus

Financial actions taken by a government to encourage economic growth or prevent an economic downturn.

Fiscal Policy

A government's adjustment of its spending levels and tax rates to monitor and influence a country's economy.

National Debt

The total amount of money that a country's government has borrowed, typically through issuing government bonds.