The Primary Benefit to the Macroeconomy of Increasing Government Spending

question 57

Multiple Choice

The primary benefit to the macroeconomy of increasing government spending is a(n)

• A)decrease in the price level.
• B)decrease in real GDP.
• C)increase in the price level.
• D)decrease in the unemployment rate.

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Definitions:

Economic Efficiency

An arrangement whereby resources are utilized in the most efficient way to increase the output of goods and services at the minimum possible cost.

Monopoly Power

The ability of a single entity or company to control or dominate a particular market, often leading to higher prices and reduced competition.

Oligopolists

Firms or entities within an industry where a small number control the majority of the market share, often leading to limited competition.

Highest Profit

The maximum financial gain that can be achieved from business activities after subtracting all relevant costs and expenses.