Under Which of the Following Circumstances Does an Increase in a Government

question 55

Multiple Choice

Under which of the following circumstances does an increase in a government budget deficit have a larger effect on AD?

• A)the more sensitive investment is to a change in interest rates
• B)the more money demand shifts as a result
• C)the less money demand shifts as a result
• D)the smaller the government expenditures exceed tax revenue

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Definitions:

Embezzlement

The theft or misappropriation of funds or property entrusted to one's care by their employer or another party.

Audit

An inspection or examination of financial records to verify their accuracy and compliance with laws or standards.

Accountant

A professional who performs accounting functions such as audits or financial statement analysis according to established standards.

Underwriter

A person or company that evaluates and assumes the risk of another party, such as in insurance or securities, in exchange for a premium or commission.