According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to Select one: a. a decrease in gross private domestic investment. O b. no change in GDP because only federal government expenditures are included in GDP. O c. a decrease in government expenditure on goods and services. O d. no change in GDP because state and local government expenditure is always canceled out by federal government expenditure.
According to the BEA, in the second quarter of 2012 state and local government spending on goods and services changed by -1.4 percent. Using the expenditure approach, this change leads to Select one: a. a decrease in gross private domestic investment. O b. no change in GDP because only federal government expenditures are included in GDP. O c. a decrease in government expenditure on goods and services. O d. no change in GDP because state and local government expenditure is always canceled out by federal government expenditure.
Chapter4: The Aggregate Economy
Section: Chapter Questions
Problem 8E
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