Which of the Following Statements Is True of Government Spending

question 41

Multiple Choice

Which of the following statements is true of government spending?

• A) An increase in government spending raises the equilibrium level of income by a multiple of the original spending increase.
• B) Government spending is a part of monetary policy, not fiscal policy.
• C) A decline in government spending brings about an expansion in the economy.
• D) An increase in government spending increases the recessionary gap in the economy.
• E) An increase in government spending shifts the aggregate demand curve downward by a fraction of the rise in government spending.

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Definitions:

Managers Interaction

The process of communication and collaboration among managers within an organization to achieve business objectives.

Management Theorist

An expert or scholar who develops concepts and principles regarding how to organize, plan, direct, and control resources and activities within organizations.

Middle Management

A level of management in an organization that acts as an intermediary between executive management and operational staff, responsible for implementing organizational policies and strategies.

Systematic Program

A planned set of activities or procedures designed to achieve specific goals or outcomes, often structured and organized in a methodical way.