According to the model developed in Chapter 3, when government spending increases without a change in taxes:
A)Aconsumption increases.
B)consumption decreases.
C)investment increases.
D)investment decreases.

Question

Quizplus · Accepted Answer

When government spending increases without a change in taxes, it can lead to higher interest rates due to increased demand for funds, which can crowd out private investment, causing it to decrease.

According to the Model Developed in Chapter 3, When Government