When There Is an Increase in Government Expenditures,which of the Following

question 63

Multiple Choice

When there is an increase in government expenditures,which of the following raises investment spending?

• A)the investment accelerator and crowding out
• B)the investment accelerator but not crowding out
• C)crowding out but not the investment accelerator
• D)neither the investment accelerator or crowding out

---

Definitions:

Ceteris Paribus

A Latin phrase meaning "other things being equal," used in economics to isolate the effect of one variable by holding others constant.

Consumer Income

Refers to the total earnings or financial inflow that consumers receive from all sources, affecting their purchasing power and demand for goods and services.

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded in a market, leading to a stable market condition.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price level in a specified period.