Suppose the government builds a large dam in rural Tennessee. As a result,

Question

Quizplus · Accepted Answer

When the government builds a large dam in a rural area, it creates jobs and economic activity in the area, which leads to an increase in consumption expenditures. This means that people in the area have more money to spend on goods and services, which helps to stimulate the local economy. Disposable income is not likely to decrease, as the construction of the dam will provide jobs and income for local residents. Induced taxes may decrease if people in the area spend their money on non-taxable items, but this is not always the case.

Suppose the Government Builds a Large Dam in Rural Tennessee