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A rise in government expenditure can lead to

Economics
WAEC 2011

A rise in government expenditure can lead to

  • A. higher inflation
  • B. higher unemployment
  • C. lower profits for industries
  • D. lower importation of raw materials by industries
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Correct Answer: Option A
Explanation

Increased government spending invariably means increasing the money supply in the country. Excess money in circulation can lead to inflationary tendencies.

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