Question

Total spending in the economy is most likely to increase by the largest amount if which of the following occur to government spending and taxes, all things equal?

Government Spending                  Taxes

a. Decrease                                       Increase

b. Decrease                                       No change

c. Increase                                         Increase

d Increase                                         Decrease 

Answer 1

The correct is "D"

Government expenditure -Increase and

Taxes-decrease