Classical Economists Argue That an Increase in Government Expenditures Will

question 49

Multiple Choice

Classical economists argue that an increase in government expenditures will

• A)shift FE line to right increasing full-employment output.
• B)shift FE line to left decreasing full-employment output.
• C)shift FE line to right increasing interest rate.
• D)shift FE line to right decreasing labour supply.

---

Definitions:

Downward Sloping

Describes a line or curve on a graph that shows a decrease in value as it moves from left to right, often used in economics to describe how changes in price affect demand.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Health Insurance Costs

The expenses associated with medical policies that cover the cost of medical services for the insured.

Premium Per Person

The amount of money charged per individual for insurance coverage.