Increases in government spending will lower the long-term growth rate of GDP if it lowers ________ and the government purchases ________ goods and not ________ goods.

Question

Quizplus · Accepted Answer

Increases in government spending can lower the long-term growth rate of GDP if it reduces investment, as investment is crucial for future economic growth. If government spending is directed towards consumption rather than investment, it may not contribute to long-term growth.

Increases in Government Spending Will Lower the Long-Term Growth Rate