A Decrease in Government Purchases, Other Things Being Equal, Will

question 36

Multiple Choice

A decrease in government purchases, other things being equal, will tend to _____.

• A)increase interest rates and consequently decrease private investment
• B)increase interest rates and consequently increase private consumption
• C)decrease interest rates and consequently decrease private investment
• D)decrease interest rates and consequently increase private investment
• E)decrease interest rates and consequently decrease private consumption

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Definitions:

Principal

The primary party involved in a transaction or agreement, especially in finance, law, or education, or the amount of money on which interest is paid or received.

All Business

The term "all business" generally implies a focus on practical and effective actions, often with a serious or determined approach to work or tasks.

Conduct

Refers to the manner in which a person behaves, especially in a particular place or situation, or the execution of an action.

Principal/Employer

The party in an agency relationship who authorizes another (the agent) to act on their behalf, or the entity that hires employees to perform work.