A Temporary Increase in Government Purchases Causes the Real Interest

question 61

Multiple Choice

A temporary increase in government purchases causes the real interest rate to ________ and output to ________.

• A)rise;rise
• B)rise;fall
• C)fall;rise
• D)rise;remain unchanged

---

Definitions:

Crisis Situations

Emergency or pivotal moments requiring immediate and effective responses to avoid or mitigate disasters.

Bureaucratic Inertia

The tendency of bureaucratic organizations to resist change and continue with current practices, even in the face of new challenges or opportunities.

Decentralized Decision Making

A system or process where decision making is distributed or delegated away from a central authority, allowing for more local or individual control.

Multiple Lines

Refers to several distinct paths or methods used simultaneously or in sequence, applicable in various contexts like communication, product strategies, or problem-solving.