According to Non-Keynesians, How Will an Increase in Government Spending

question 148

Multiple Choice

According to non-Keynesians, how will an increase in government spending financed by borrowing during a recession affect recovery?

• A) Higher future taxes and interest rates will be required to finance the larger debt and this will weaken the recovery.
• B) Repayment of the debt can always be shifted to the future, making it possible to keep tax rates low and thereby strengthen the recovery.
• C) Higher interest payments will increase future government spending, and thereby promote a stronger the recovery.
• D) The increase in government spending will exert a multiplier effect on the economy, leading to a stronger recovery.

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Definitions:

Hospice Care

Specialized care designed to provide comfort and support to patients and their families during the end stages of a terminal illness.

Terminal Illnesses

Conditions that are considered incurable and are likely to lead to death.

Dignity

A quality of being worthy of esteem or respect.

Pain Management

The discipline concerned with easing the suffering and improving the quality of life for those living with pain through various treatments and techniques.