If the government increases expenditure without raising taxes, this will

1 answer:

3 0

If the government increases expenditure without raising taxes, this will cause the interest rate to increase, thereby, reducing private investment and crowding out the private sector and cause a decrease in the domestic exchange rate which will increase exports and decrease imports. Expenditures is increasing the amount of money and money available to be spent. In this case, the government is increasing the amount of money that tis available to be spent but they aren't imposing taxes on consumers with the increase.

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If the government increases expenditure without raising​ taxes, this will

If the government increases expenditure without raising taxes, this will