Page 104 - Macroeconomics. book docx_Neat

Q2

Government spending affects the economy mainly through:

A. Reducing national income

B. Increasing savings only

C. Decreasing aggregate demand
D. Increasing aggregate demand and employment

Answer: D

Q3

In the expenditure approach, government spending is represented by:

A. C

B. G
C. I

D. X

Answer: B

Q4

Which of the following is included in government spending (G)?

A. Spending on education

B. Pension payments

C. Unemployment benefits
D. Interest on public debt

Answer: A

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