Suppose Policy Makers Pass a Budget That Results in a Reduction

question 251

Multiple Choice

Suppose policy makers pass a budget that results in a reduction in government spending and no change in taxes. This reduction in government spending will likely

• A) increase government borrowing and increase interest rates.
• B) generate extra tax revenues to cover the extra spending.
• C) reduce interest rates and increase planned investment.
• D) reduce interest rates, increase in planned investment, and increase real GDP.

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Definitions:

Ruminating

The repetitive and passive focus on symptoms of distress and the possible causes and consequences of these symptoms.

Exacerbates Stress

To make stress or tense situations worse or more severe through additional pressure or conflict.

Personal Problems

Issues or challenges that affect an individual's personal life, which may range from health, relationships, to financial troubles.

Work-Related Problems

Issues or difficulties encountered in the professional environment that affect performance, relationships, or job satisfaction.