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

---

Definitions:

Time Horizon

The length of time over which an investment or a business project is expected to be active or achieve a certain goal.

Subcontracts

Agreements made between a main contractor and a third party to perform part of the work assigned under a primary contract.

Expensive

Involving a high cost or requiring considerable expenditure.

Outsourcing Team

A group of external professionals or a company hired to perform tasks, handle operations or provide services that are either difficult to manage or are outside the organization's expertise.