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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