If the Government Increases Its Spending, Which of the Following

question 21

Multiple Choice

If the government increases its spending, which of the following would tend to reduce the size of the multiplier?

• A) higher taxes for the finance of the additional spending
• B) higher interest rates as the result of additional borrowing to finance the spending
• C) the flow of the spending into sectors where the unemployment rate is low
• D) all of the above

---

Definitions:

Mortality

The state of being subject to death; the incidence of death in a population.

Morbidity

The condition of being diseased or the incidence of illness in a population.

Cross-Sectional Studies

Observational studies that analyze data from a population at a specific point in time to investigate patterns and correlations.

Longitudinal Studies

Research designs that follow the same subjects over a period of time, allowing for the observation of changes or developments in the subjects.