According to the 1994 Economic Report of the President,how would market forces enable a cut in government expenditures to lead to an increase in investment expenditures?
A)Through lower taxes
B)Through increased taxes
C)Through lower interest rates
D)Through government regulation
E)Through increased interest rates

Question

Quizplus · Accepted Answer

According to the Economic Report of the President, if government expenditures are reduced, it would decrease the demand for money which would lead to a decrease in interest rates. Lower interest rates would make it cheaper for businesses to borrow money, which would encourage investment expenditures. Therefore, market forces would enable a cut in government expenditures to lead to an increase in investment expenditures through lower interest rates.

According to the 1994 Economic Report of the President,how Would