An Increase in Government Spending Without an Accompanying Increase in Taxes

question 77

Multiple Choice

An increase in government spending without an accompanying 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:

Constitutional

Relating to, or in accordance with, the constitution of a country or organization, often implying legality or legitimacy.

Native Americans

Indigenous peoples of the Americas, including those who inhabited the territories of the modern United States prior to European colonization.

Collectively Naturalized

Refers to the process by which a group of people are granted citizenship simultaneously, as opposed to the individual naturalization process; typically occurs following territorial or geopolitical changes.

Congress

The legislative body of the United States government, consisting of two houses: the Senate and the House of Representatives.