If government spending increases, what happens to injections?

If government spending increases, what happens to injections?

• A. Not enough information
• B. Decreases
• C. Stays the same
• D. Increases

Answer: (D)

Injections are additions to overall spending coming from outside households’ own spending decisions. Government spending is one of the classic injections. When the government increases its spending, more money flows into the economy, boosting overall demand and income. So injections rise. This isn’t about staying the same or decreasing; those would contradict the fact that the government is putting more spending into the economy. The other options don’t fit because the direct effect of higher government spending is to add to the spending in the economy, not leave it unchanged or reduce it.

Injections are additions to overall spending coming from outside households’ own spending decisions. Government spending is one of the classic injections. When the government increases its spending, more money flows into the economy, boosting overall demand and income. So injections rise.

This isn’t about staying the same or decreasing; those would contradict the fact that the government is putting more spending into the economy. The other options don’t fit because the direct effect of higher government spending is to add to the spending in the economy, not leave it unchanged or reduce it.