Which of the following does not usually occur when there is an increase in government spending?
A) Government purchases crowd out private-sector spending.
B) Total spending decreases.
C) The interest rate increases.
D) Investment spending declines.
E) Household saving increases.

Question

Quizplus · Accepted Answer

An increase in government spending usually leads to an increase in total spending as the government injects more money into the economy. The other options are all potential consequences of an increase in government spending, such as crowding out private-sector spending or putting upward pressure on interest rates. However, it is not typical for total spending to decrease in this scenario.

Which of the Following Does Not Usually Occur When There