A consumer and investment spending always vary inversely.
B increases in government spending financed through borrowing will increase the interest rate and thereby reduce investment.
C tax increases are paid primarily out of saving and therefore are not an effective fiscal device.
D it is very difficult to have excessive aggregate spending in the U.S. economy.
B increases in government spending financed through borrowing will increase the interest rate and thereby reduce investment.
C tax increases are paid primarily out of saving and therefore are not an effective fiscal device.
D it is very difficult to have excessive aggregate spending in the U.S. economy.
ANSWER:
B