In the Traditional Keynesian Model, an Increase in Government Spending

question 24

Multiple Choice

In the traditional Keynesian model, an increase in government spending leads to all of the following EXCEPT

• A)an increase in aggregate demand.
• B)a higher price level.
• C)an increase in consumption.
• D)higher real GDP.

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Definitions:

Equity Investment

The act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit, primarily through the ownership of equity.

Separately Funded

A financial arrangement where specific projects or objectives are funded independently from an organization's main operating budget.

Dedicated Capital

Refers to funds allocated for a specific purpose or investment, typically involving long-term projects or goals.

Capital Structure

The particular combination of debt and equity used by a firm to finance its overall operations and growth.