Which of the following is an example of a decrease in government purchases?
A)The government cancels an order for new military equipment.
B)The Federal Reserve sells government bonds.
C)The government increases personal income taxes.
D)The government decreases unemployment insurance benefit payments.

Question

Which of the following is an example of a decrease in government purchases?​
A)​The government cancels an order for new military equipment.
B)​The Federal Reserve sells government bonds.
C)​The government increases personal income taxes.
D)​The government decreases unemployment insurance benefit payments.

Quizplus · Accepted Answer

Canceling an order for new military equipment directly reduces government spending, which is a decrease in government purchases.

Which of the Following Is an Example of a Decrease