If Government Spending Increases by $1 Million While Net Taxes

question 71

Multiple Choice

If government spending increases by $1 million while net taxes are unchanged, then:

• A)public saving increases.
• B)public saving decreases.
• C)public saving does not change.
• D)private saving increases.

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Definitions:

Top-down Approach

A problem-solving strategy that starts with the big picture before breaking it down into smaller, more manageable parts.

Schema-inconsistent

Pertains to information or events that do not fit within existing cognitive frameworks or expectations.

Highly Salient

Something that stands out conspicuously or is most noticeable in a particular context.

Primacy Effect

The inclination to recall information more effectively when it's introduced initially than when it comes later.