All else being equal, an increase in government spending will worsen the trade balance.

Name: All else being equal, an increase in government spending will worsen the trade balance.
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An increase in government spending can lead to a higher demand for imports, as the government purchases goods and services from other countries. This can increase imports and worsen the trade balance, assuming there is no corresponding increase in exports.

All Else Being Equal, an Increase in Government Spending Will