If the Government Finances an Increase in Government Purchases with an Increase

question 179

Multiple Choice

If the government finances an increase in government purchases with an increase in taxes,which of the following would you not expect to see?

• A)an increase in the exchange rate
• B)a decrease in the interest rate
• C)an increase in aggregate demand
• D)a decrease in net exports

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Definitions:

Homeostasis

The tendency of a system, especially the physiological system of higher animals, to maintain internal stability, due to the coordinated response of its parts to any situation or stimulus that would disturb its normal condition.

Stress

A state of mental or emotional strain resulting from adverse or demanding circumstances.

Voluntary Time-Outs

A strategy where individuals choose to remove themselves from a stressful or overwhelming situation temporarily, to regain composure and perspective.

Staff Morale

Staff morale is the overall outlook, attitude, satisfaction, and confidence that employees feel at work. A high morale is often associated with high productivity and retention.