What Impact Would You Expect an Increase of $63 Billion

question 34

Multiple Choice

What impact would you expect an increase of $63 billion in federal government spending to have on the economy?

• A)consumer spending would fall and investment spending would rise.
• B)net exports would rise and consumer spending would rise.
• C)consumer spending would fall and investment spending would fall.
• D)savings would rise and taxation would fall.
• E)consumer spending would rise and potential GDP would rise.

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Definitions:

Specific Purpose

A clearly defined and precise goal or objective that a project, action, or entity aims to achieve.

Market Signaling

Actions taken by buyers and sellers to communicate quality in a world of uncertainty.

Education

The systematic process of facilitating learning, or the acquisition of knowledge, skills, values, and habits.

Risk-loving

Refers to a preference for risk when making choices under uncertainty, where a greater level of risk is associated with the potential for higher rewards.