Why Might an Expansion in Government Spending Increase the Severity

Multiple Choice

Why might an expansion in government spending increase the severity of the coordination problem during a recession?

A) Increases in government spending will not affect the composition of aggregate demand.
B) Congress is unlikely to approve increases in government spending during a recession.
C) Spending increases will be driven by political considerations and will often flow into areas where resources are already fully employed.
D) Government spending can be counted on to flow toward high productivity projects.