More government spending
A)can compete with private spending and cause crowding out.
B)increases the government surplus.
C)is always beneficial.
D)reduces the current account deficit.
E)lowers the government deficit.

Question

Quizplus · Accepted Answer

Increased government spending can lead to a situation of crowding out, where private investment decreases as a result of government borrowing and higher interest rates. This can have negative effects on economic growth and development. Therefore, it is not always beneficial and can have unintended consequences. Options B, D, and E are incorrect as they do not reflect the impact of increased government spending on the economy.

More Government Spending