Recall Application 2, "Using Long-Term Macro Data to Measure Multipliers

Multiple Choice

Recall Application 2, "Using Long-Term Macro Data to Measure Multipliers," to answer the following questions:
-According to the application, the reason why other studies found a strong correlation between government spending and GDP was:

A) because government spending increased in response to an increase in GDP.
B) because the increase in GDP was caused by an increase in government spending.
C) because government spending lowered interest rates and increased investments.
D) A and C are correct.