If Government Spending Decreases,which of the Following Would Occur

question 162

Multiple Choice

If government spending decreases,which of the following would occur?

• A) An increase in GDP,an increase in the price level,an increase in money demand,and an increase in the interest rate
• B) An increase in GDP,a decrease in the price level,an increase in money demand,and a decrease in the interest rate
• C) A decrease in GDP,a decrease in the price level,a decrease in money demand,and a decrease in the interest rate
• D) A decrease in GDP,a decrease in the price level,an increase in money demand,and an increase in the interest rate
• E) An increase in GDP,an increase in the price level,a decrease in money demand,and a decrease in the interest rate.

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Definitions:

Loss

A financial condition where expenses exceed income, leading to a negative net income.

Euros

The official currency of the Eurozone, used by 19 of the 27 European Union countries.

Controlling Influence

The power or authority one entity has over another, typically in the context of a parent company's significant influence over the operations and decision-making of its subsidiary.

Consolidation Method

An accounting technique used when a company owns more than 50% of another company, requiring the financial statements of both companies to be combined as one.