If Increased Government Spending Has No Effect on Either the Level

question 108

Multiple Choice

If increased government spending has no effect on either the level of real national income or the price level,we know that

• A)the economy was already at full employment.
• B)the crowding out of private sector investment spending and consumption spending was complete.
• C)the interest rate effect was small.
• D)the government spending was on goods and services the people didn't value.

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Definitions:

Computerized Accounting System

An accounting system that utilizes software to record, store, and process financial transactions and data.

Month-end Postings

The journal entries made at the end of the month to record all transactions and adjustments for that month.

Financial Year

A period of twelve months used for accounting purposes and the preparation of financial statements, not necessarily aligning with the calendar year.

Cash Receipts Journal

A specialized accounting journal used to record all money that is received by a business.