The traditional Keynesian approach concludes that an increase in government spending
A) generates a greater increase in investment spending.
B) generates a greater increase in total spending because consumption spending increases as incomes increase.
C) has no effect on total spending because consumers increase saving by an equal amount.
D) generates an equal increase in total spending because government spending makes up part of total spending.
B
You might also like to view...
If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, the country with the comparative advantage in producing wheat is ____ and the country with the absolute advantage in producing potatoes is ____
a. the United States; the United States b. the United States; Ireland c. Ireland; the United States d. Ireland; Ireland
In a perfectly competitive market, an increase in output could be caused by
a. decrease in consumer demand b. an unavoidable increase in fixed costs c. higher input prices d. an increase in consumer demand