Which of the Following Are Effects of an Increase in Government

question 2

Multiple Choice

Which of the following are effects of an increase in government spending financed by a tax increase?

• A)the tax increase reduces consumption;the change in the interest rate reduces residential construction
• B)the tax increase reduces consumption;the change in the interest rate raises residential construction
• C)the tax increase raises consumption;the change in the interest rate reduces residential construction.
• D)the tax increase raises consumption;the change in the interest rate reduces residential construction

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Definitions:

Governmental Accounting

Accounting practices specifically designed for the public sector, focusing on accountability rather than profitability.

Planning

The process of making detailed strategies or arrangements to achieve specific goals or outcomes.

Future Operations

Planning and activities undertaken to ensure the continuation and success of a business's activities in upcoming periods.

Actual Performance

The real, observed outcomes or results of a process, person, or organization's efforts, compared against planned or expected performance.