If the U.S.government spent $20 million paying people to dig holes in 2005 and then spent $30 million paying the same people to fill the holes up again that same year,we would expect the net effect to be a(n):

Question

Quizplus · Accepted Answer

The net effect of spending $20 million to dig holes and then $30 million to fill them up again would be an increase in the budget deficit as government purchases of goods and services increased by $50 million. This is because both actions involve direct government spending on services, totaling $50 million, not transfer payments or a partial increase based on the difference in spending.

If the USgovernment Spent $20 Million Paying People to Dig Holes in Holes