A rise in government spending could Group of answer choices a. decrease both the size and scope of government. b. increase the size, but not the scope of government. c. decrease the size, but increase the scope of government. d. increase both the size and scope of government

Question

Business

Cristal

20 January, 19:16

A rise in government spending could Group of answer choices a. decrease both the size and scope of government. b. increase the size, but not the scope of government. c. decrease the size, but increase the scope of government. d. increase both the size and scope of government

+5

Answers (1)

Know the Answer?

Ashleigh Schneider · Answer 1

A rise in government spending could decrease both the size and scope of government.

Option A.

Explanation:

Increased government investment is expected to increase economic growth. In the short run, this can result in higher production. It can cause inflation as well.

Higher government expenditure will also affect market output-depending on the region of government expenditure. When capital spending was focused, this might lead to greater productivity and increase the overall long term supply. Although expenditure on welfare or retirement benefits can reduce inequality, more profitable private industry investment can be crowded up.

In other words, politicians can boost economic output by reducing government size and scope.