Direct expenditure offsets are
A) the discretionary changing of government expenditures to achieve a higher employment level.
B) the decrease in planned investment that occurs as the result of an increase in interest rates.
C) the same as the Ricardian equivalence theorem.
D) the decrease in spending in the private sector in areas in which the government is competing.

Question

Quizplus · Accepted Answer

Direct expenditure offsets occur when government spending in certain areas leads to a decrease in private sector spending in those same areas, often because the government is competing with the private sector for resources or services.

Direct Expenditure Offsets Are