The Effect of an Increase in Government Spending on Real

question 14

Multiple Choice

The effect of an increase in government spending on real GDP is reduced if the

• A) smaller the crowding-out effect.
• B) larger the rate of inflation.
• C) smaller the percentage of government spending financed by tax increases.
• D) flatter the aggregate supply curve.
• E) larger the government budget surplus.

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Definitions:

Universal

Pertaining to or affecting all members of a class or every entity in a domain without exception.

Research

The methodical exploration and examination of materials and sources to ascertain facts and derive new insights.

Leptin

A hormone primarily made by adipose cells and enterocytes in the small intestine that helps to regulate energy balance by inhibiting hunger.

Appetite Control

The regulatory processes that govern hunger, satiety, and the consumption of food, involving both psychological and biological mechanisms.