Why Does a Temporary Increase in Government Purchases Increase Labour

question 40

Multiple Choice

Why does a temporary increase in government purchases increase labour supply in the classical model?

• A)The rise in government spending increases labour demand,increasing the real wage,and so people increase their labour supply.
• B)Increased government purchases make people better off,so they work more hours.
• C)The increase in current or future taxes needed to pay for the increase in government purchases reduces people's wealth.
• D)People prefer to work harder when the government is doing more for them.

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Definitions:

Multidisciplinary Team

A group composed of members from different disciplines or professions working together towards a common goal, especially in health and social care settings.

Social Action Group

A collective of individuals or organizations that come together to address social issues or promote social change through collective action.

Deliberative Bodies

Organizations or groups that engage in thorough discussion and consideration of issues before making decisions.

Consensus

A general agreement among all members of a group or community, often reached through negotiation and discussion.