The Expansionary Effects of an Increase in Government Expenditures Will

question 107

Multiple Choice

The expansionary effects of an increase in government expenditures will tend to be offset, at least partially, if

• A) government borrowing drives interest rates upward.
• B) taxes are not also increased.
• C) business decision makers and consumers become more optimistic as the result of the fiscal stimulus.
• D) the economy is operating well below its full-employment capacity.

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Definitions:

Selling

The process involved in promoting and transferring ownership of a product or service to a customer in exchange for payment.

Administrative Expense

Costs associated with the general administration of a business, including salaries of non-sales personnel, office supplies, and rent, not directly tied to production or sales.

Tenant-Days

A metric used in property management, representing the total number of days that tenants occupy a space within a specific period.

Planning Budget

A budget created for a particular level of activity; it can be adjusted over time as actual activity levels change.