An Increase in Government Spending Without Any Increase in Taxes

question 97

Multiple Choice

An increase in government spending without any increase in taxes

• A) does not increase aggregate demand.
• B) would effectively eliminate an inflationary gap.
• C) causes investment spending to increase.
• D) requires additional government borrowing.

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Definitions:

Learned Helplessness

Passive behavior produced by exposure to unavoidable aversive events.

Pessimistic Explanatory Style

A tendency to explain negative events as being pervasive, permanent, and personal.

Depression

A common mental disorder characterized by persistent sadness, a lack of interest in activities, and a decreased ability to enjoy life.

Passive Attribution

The tendency to explain someone's behavior by attributing it to the situation or environment rather than to the individual's own traits or choices.