Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

c . Why is the change in GDP is not exactly equal to the change in government spending? The government's spending isn't as affective as

c. Why is the change in GDP is not exactly equal to the change in government spending?
The government's spending isn't as affective as they intend it to be.
Government spending increases consumer confidence, so consumers spend more.
Other transaction costs need to be accounted for in GDP.
The government's spending becomes the income of other people, who then spend it and further increase GDP.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Econometric Analysis

Authors: William H. Greene

8th Edition

978-0134461366, 0134461363

More Books

Students also viewed these Economics questions