If the Government Increases Spending but Does Not Raise Taxes

question 254

Multiple Choice

If the government increases spending but does not raise taxes

• A)aggregate demand will increase without any effect on the price level.
• B)borrowing by the government will take place.
• C)the government will have to sell some assets, such as oil and national parks.
• D)the government will have to either lower expenditures or raise taxes the next year.

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