A $100 Million Increase in Government Spending Increases Equilibrium GDP

question 371

Multiple Choice

A $100 million increase in government spending increases equilibrium GDP by:

• A)$100 million.
• B)more than $100 million.
• C)less than $100 million.
• D)zero.

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Definitions:

Industrial Economy

An economy characterized by the mass production of goods and services in large-scale enterprises, utilizing technological advancements and machinery.

Postindustrial Economy

An economic phase in which manufacturing no longer plays a dominant role, often characterized by an increase in service and information-based industries.

Socialism

A political and economic theory advocating for collective or governmental ownership and administration of the means of production and distribution of goods.

Capitalist Society

A socio-economic system characterized by private or corporate ownership of capital goods, investments determined by private decision, and prices, production, and the distribution of goods determined mainly by competition in a free market.