The government wants to increase its spending by $1 billion to stimulate the economy and is counting on the government spending multiplier to help. Taking into account direct expenditure offset effects, what is its best spending option?
A) a new cruise missile for the military
B) expanding the school lunch program
C) constructing more low income housing
D) providing textbooks for college students
Correct Answer:
Verified
Q81: If the government increases spending and there
Q83: By definition, a direct expenditure offset will
Q84: The crowding-out effect is
A)the tendency of contractionary
Q90: According to supply-side economics, changes in marginal
Q90: The crowding-out effect is
A)due to the upward
Q91: Supply-side economics focuses on tax cuts to
Q92: If the government increases spending but does
Q94: The Ricardian equivalence theorem states that
A) an
Q96: One part of the supply-side argument is
Q99: At tax rates higher than the tax
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