Assume There Is an Increase in Government Spending fiNanced by Government

Multiple Choice

Assume there is an increase in government spending financed by government borrowing. With a specific money supply, the consequent

A) contractionary impact might be lessened by the resulting increase in the interest rate.
B) expansionary impact might be lessened by the resulting increase in the interest rate.
C) contractionary impact might be enhanced by the resulting decline in the interest rate.
D) expansionary impact might be enhanced by the resulting decline in the interest rate.