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:

Acquiring

The process of obtaining ownership or control of something, often referenced in the context of corporate takeovers or purchasing assets.

Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount for immediate cash.

Debt Capital

Funds borrowed by businesses to finance their operations or growth, which must be repaid to lenders with interest.

Equity Capital

Funds that are raised by a company in exchange for a share of ownership in the company.