If the Government Increases Its Spending but Does NOT Raise

question 22

Multiple Choice

If the government increases its spending but does NOT raise taxes

• A) aggregate demand will increase without any effect on the price level.
• B) the government will have to borrow funds.
• C) the government will have to reduce the money supply.
• D) the government will have to raise expenditures or lower taxes the next year.

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Definitions:

Attributional Biases

Cognitive biases that affect the way we determine the causes of our own and others' behaviors, often leading to errors in judgment.

Oppression

The exercise of authority or power in a burdensome, cruel, or unjust manner, often to maintain dominance over a group or individual.

Public Discourse

The exchange of ideas, information, and viewpoints in the public sphere, often involving discussion on societal issues.

Leisure Time

Free time spent away from job responsibilities, chores, and duties, often pursued for relaxation, entertainment, or other personal enjoyment.