Increases in government spending do little to change long-run economic growth.

Question

Quizplus · Accepted Answer

While government spending can have a short-term impact on economic growth, in the long run it is largely determined by factors such as technological progress, productivity, and labor force participation. This is known as the Solow growth model, which suggests that increases in government spending primarily lead to temporary increases in output, with little effect on the long-term trend of economic growth.

Increases in Government Spending Do Little to Change Long-Run Economic