BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Decrease exports
|
|
|
Increase taxes
|
|
|
Increase government spending
|
|
|
Decrease government subsidies
|
Detailed explanation-1: -Increased government spending is likely to cause a rise in aggregate demand (AD). This can lead to higher growth in the short-term. It can also potentially lead to inflation.
Detailed explanation-2: -In response to the financial slowdown and its impact on the economy, the government plays a key role by increasing its spending in order to boost economic growth.
Detailed explanation-3: -Which of the following is a reason a government might increase government spending? It is concerned that the unemployment rate is too high.
Detailed explanation-4: -In the early stages of sustained growth, government has often provided the incentives for entrepreneurship to take hold. In some economies the development of transportation, power, and other utilities has been carried out by the government. In others the government has offered financial inducements and subsidies.