In the Classical Model,if Government Tries to Increase Employment and Output

question 147

Multiple Choice

In the classical model,if government tries to increase employment and output by increasing its own purchases,

• A) it will achieve its goal and economic conditions will improve
• B) it will not attain its objective unless it also decreases taxes
• C) its actions will cause the interest rate to rise,which will choke off investment spending
• D) firms will be motivated to increase their output,thereby creating even more jobs
• E) saving will also increase,as more people are employed

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