An Increase in Government Spending

question 28

Multiple Choice

An increase in government spending

• A)increases the interest rate and so investment spending increases.
• B)increases the interest rate and so investment spending decreases.
• C)decreases the interest rate and so increases investment spending increases.
• D)decreases the interest rate and so investment spending decreases.

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Definitions:

GDP

Gross Domestic Product, a measure of the total economic output of a country within a specific time period.

Net Exports

The difference between a country's total value of exports and its total value of imports.

Economic Well-Being

The level of prosperity and standard of living enjoyed by an individual, group, or nation, often measured through indicators like income, poverty rates, and unemployment.

GDP Deflator

A metric for assessing the price rates of all freshly created, domestic final goods and services in an economy.