84% 0 This is a Multiple Choice question/ Itis worth 1 point/You have 2of 2 ttem

Question

84% 0 This is a Multiple Choice question/ Itis worth 1 point/You have 2of 2 ttemptsremaining,/There is no attempt penalty 03 Question point) a See page 511 v 1st attempt SeeHint Suppose the government of Dooseldorf increased its spending by $700 million to fight a recession If the government's budget was balanced before the recession, which of the following will be most likely to happen by the end of the year?(Assume there are no changes in the tax rate.) Choose one: O A. The government will have a budget deficit of exactly $700 million - B. The government will have a balanced budget. The government will have a budget deficit of less than $700 million - D. The government will have a budget deficit of more than $700 million.

Explanation / Answer

Correct option: (A)

Reason: Since government spending is a type of government expenditure, an increase in government spending by $700 million will disturb the balanced budget and increase the deficit by exactly the same amount.

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.