Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It reduces national debt by increasing tax revenue.
B
It can increase national debt but stimulate economic growth.
C
It has no effect on national debt or growth.
D
It decreases economic growth by raising interest rates.
Understanding the Answer
Let's break down why this is correct
Answer
When the government increases its spending, it often borrows money to pay for things like infrastructure, education, or healthcare. This borrowing adds to the national debt, which is the total amount of money the government owes. However, if the spending is used wisely, it can boost economic growth by creating jobs and improving services. For example, building a new highway can make transportation easier, helping businesses grow and leading to more jobs. So, while more spending can increase debt, it can also lead to a stronger economy if it is invested in the right areas.
Detailed Explanation
When the government spends more money, it can lead to more jobs and business activity. Other options are incorrect because Some might think that more spending directly means more tax money; It's a common belief that spending has no effect.
Key Concepts
Fiscal Policy
National Debt
Economic Growth
Topic
Fiscal Policy and National Debt
Difficulty
easy level question
Cognitive Level
understand
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