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Additional spending on military weapons

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Reference no: EM131040099

If the government levies $20 billion in taxes to finance additional spending on military weapons, the net impact on total employment will be

a. a substantial increase in employment because the additional spending will create lots of jobs.

b. a substantial decrease in employment because the higher taxes will destroy lots of jobs.

c. small because the higher taxes will reduce spending in the private sector, which will tend to offset any jobs created by the government spending.

d. a substantial expansion in employment, but only if the additional spending leads to an increase in the general level of prices.

Reference no: EM131040099

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