Which of the following is true of government purchases?
A)They are positively related to current income.
B)They are negatively related to current income.
C)They are directly related to taxes.
D)They are decided by public officials.
E)They depend on the market rate of interest.

Question

Quizplus · Accepted Answer

Government purchases are decided by public officials, hence option D is correct. Option A is incorrect because government purchases may not necessarily be related to current income. Option B is incorrect because there is no evidence to support that government purchases are negatively related to current income. Option C is incorrect because government purchases and taxes are independent variables. Option E is incorrect because government purchases do not depend on the market rate of interest.

Which of the Following Is True of Government Purchases